Comments from BOC Deputy Murray:
- One reason for weak exports could be US fiscal cliff and budget consolidation over past 2 years
- Early evidence suggests about 12% of non-commodity exports went to US govt sector from 1997-2012
- Bank of Canada thinks housing is stabilizing, risk remain elevated
- Household debt and housing activity have approached levels where real estate busts took place elsewhere
- One explanation for weak inflation in Canada could be lagging effect of output gap
Those comments on housing could stoke worries again but it’s doubtful. The market has been worried about Canadian house prices for 8 years and this isn’t going to be the needle that breaks the camel’s back. Overall, nothing important here and USD/CAD continues to consolidate around 1.0970.
