Thursday September 6, 2018 - 14:44:29 GMT
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Bank Of Canada Holds Policy Steady; Signals October Hike
Bank Of Canada Leaves Key Target Rate Steady At 1.50% On Wednesday, as expected, the Bank of Canada left policy unchanged. There was a slightly dovish tone to the latest policy statement, but the central bank said that recent data reinforces the view that higher rates will be warranted. We recently saw Governor Polotz at the Jackson Hole conference interviewed on television seeming to imply that the Bank of Canada was comfortable following the lead of the Fed. Markets have already priced in a 25bp Fed rate hike this month (September 26) with near certain odds. At the time of the interview, markets were still digesting the July Canadian inflation data, and in his interview the Bank Governor said the data had been an outlier.
In its statement, the central bank indicated that "July headline inflation was higher than expected and that headline inflation would move back toward 2% in early 2019". It also said that higher interest rates will be warranted to achieve the inflation target. It added that the bank will continue to take gradual approach guided by data.
On balance, the outlook for the Canadian currency should remain positive, depending on how NAFTA talks play out. Its my personal view that all three NAFTA members, Canada, Mexico and U.S. see the trading partnership as being in their self interests and that when the dust settles some sort of agreement will be reached.
GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium
Mon 10 Sep 2018
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan
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