Comments from BOC Governor Steven Poloz:
- Recent data on creation of firms has been encouraging, rebound hasn't been as strong as BOC would like
- Retirement of Baby Boomers affecting Canada's growth potential
- Core inflation boosted by exchange rate and one-time effects
- Total CPI would be "quite close to zero" if not for FX and one-time factors
- Best judgement is that underlying inflation somewhere around 1.6% to 1.8%
- Recent signs labor market starting to function better; probably haven't seen the full effect of oil shock reflected in jobs data
- Positive effects should continue to build and should be supported by rate cut and lower CAD
- Still a risk oil prices could have a greater impact
- "The January rate cut is working"
- Repeats the BOC sees the economy returning to full capacity around the end of 2016 with inflation at 2%
- Repeats the BOC sees growth partially rebounding in Q2
- Full text
No surprises here and tough to read between the lines and see anything that he didn't say before. He's a bit less overly-enthusiastic about the economy but there is no signal about any change in policy or forecasts.
USD/CAD slipped a handful of pips to 1.2225 but is back at 1.2230.
