BoC: Still many concerns - Westpac

Richard Franulovich, Research Analyst at Westpac, notes that the BoC continues to run with a neutral bias though the statement still betrays a central bank with many concerns, chief among those weak business investment and non-energy exports.

Key Quotes

“Recent data will do nothing to dispel the sluggish picture of late either. But the outlook is stronger than the BoC believes.”

“A genuine floor for Canada’s terms of trade appears to be in place thanks to the OPEC deal. The Trudeau/Trump one-two fiscal punch tilts the risks for Canada’s economy in 2017 to the upside too. Few economies are easing fiscal policy like Canada. Fewer still can claim that their major trading partner is easing fiscal policy too.”

“A test of 1.30 into year’s end and early 2017 looks more compelling than 1.35/36.”