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