BoC: No clues about its next steps - Westpac

The BoC has offered no clues about its next steps now that 2015’s insurance easings have been reversed, the Bank noting future decisions, “are not predetermined and will be guided by incoming data”, explains Richard Franulovich, Research Analyst at Westpac.

Key Quotes

“But our best guess is that with: 1) global growth firming; 2) energy prices broadly stable; 3) Trudeau’s earlier stimulus still washing through the economy; and 4) confidence on the upswing, the overall thrust of the local Canadian data should point further toward broadening and selfsustaining recovery. Another hike could be delivered before the year is out.”

“The 25 Oct BoC should reveal yet further upgrades to growth and an earlier closing of the output gap.”

“USD/CAD should break below 1.20 soon with yield support continuing to trend decisively in its favour.”