BOC's Poloz: Output gap and exports are behind shift downward in inflation risks

Author: Adam Button | Category: Central Banks

Comments from Poloz in the Q&A

  • July Canadian export gain gives us some reassurance
  • Sees large recovery in the level of non-commodity exports
  • Weakness in export data is still unexplained
  • Export level is a still a problem, even with recovery
  • Output gap and exports are behind tilt downward in inflation risks
  • We think the US economy is seeing a recovery
  • It's unclear if BOC will cut forecasts in October

This is some dovish stuff but much of it is already priced in. The market is trying to sort out how likely a cut is this year but there's no clear hint here.

USD/CAD is trading up 10 pips today to 1.3213.


  • Slowing of one housing market is rarely contagious
  • We will have to see more date on Vancouver to assess impact of tax
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