BoC: Steady as she goes, for now – HSBC

David Watt, Economist at HSBC, notes that the Bank of Canada left its policy rate unchanged at 0.5% and the move was widely expected, in part because these inter-quarter rate decisions typically feature a very short statement that are light on details.

Key Quotes

“The Bank said that there is a small upside risk to its Q4 GDP growth forecast of 1.5% and also took note of the recent upside surprise to headline inflation. However, we detected a generally cautious tone to the press statement, with the Bank focusing on signs of elevated slack in Canada, in contrast to the US. While forthcoming US and global developments will influence the BoC's policy stance, we believe that domestic developments such as hours worked, wage growth, and indicators of economic activity, most notably real exports, will be the more important factors for future rate decisions.”