The BOC had hinted it may remove forward guidance but without saying ‘neutral’ the statement still indicates no bias toward hiking or cutting:
- “The Bank judges that the risks to its inflation projection are roughly balanced”
- Inflation is close to 2% target
- Core inflation rose more rapidly than expected, mainly reflecting sector-specific factors
- CPI is evolving largely as expected, underlying inflation pressures are muted
- Global growth profile is weaker than in July
- The US economy is gaining traction despite weakness elsewhere
- Canadian exports have begun to rebound but business investment remains weak
- Expects economy to reach full capacity in H2 2016 (from mid-2016)
- Canadian dollar depreciation adding about 0.1-0.3 pp to core inflation, 0.3-0.5 pp to total
More information and analysis:
- USD/CAD kicked through 1.1200 as “temporary” inflation becomes “balanced” inflation
- Large USD/CAD drop after Bank of Canada statement doesn’t add up
- Forex Technical Trading: USDCAD does a lap from a ceiling to a floor
- Update: Bank of Canada officially cancel press conference after shooting
- Bank of Canada will publish Poloz opening statement on website at 15.15 gmt
