The USDCAD is trading at 1.3114

Wilkins:

  • Canada economy is returning to potential growth
  • exports continue to be biggest wildcard
  • Outlook is clouded by persistent trade tensions
  • governing Council spent much time discussing trade
  • trade conflicts and uncertainty are projected to cut the level of Canadian GDP by as much as 2% by end of 2021
  • US is slowing to a more sustainable pace while Canada is moving back up to its trend growth
  • Canadian and US economies are converging, not diverging
  • residential investment once again adding to growth
  • oil and gas investment to contract further in 2019
  • signs housing market is improving in Toronto
  • home prices, activity still adjusting in Vancouver
  • the Canadian dollar has gained as global rates have fallen
  • trade wars complicate trade-offs for monetary policy
  • we need to be particularly focused on data given effects of trade tensions
  • labor market is very healthy, job growth above trend

Poloz:

  • BOC always takes account of CAD as prime ingredient in our forecasts. As CAD strengthens it reduces our competitiveness in international markets
  • Central banks all make their own policies based on own situations
  • lower global yields are feeding into Canada's mortgage rates
  • evidence accumulating that the trade war effects are now tangible
  • until headwinds show signs of dissipating or worsen, we are content with today's setting of interest rates
  • current rates are helping to sustain expansion
  • sustaining expansion about keeping growth near potential
  • declines to comment on if rates more likely to rise than cuts
  • strong headwinds keeping interest rates where they are
  • if we face risks and we believed they were unbalanced, that would influence our thinking about where inflation would be, and lead to a discussion about whether it was time to adjust policy
  • bond markets seeing preoccupied with downside trade risks
  • shouldn't assume monetary policy can fix trade war impact
  • markets aren't factoring complexity of trade risks
  • markets missing complexity of what would happen in case of a major shock, some think interest rates would fall, and that would solve problems