- Global uncertainty restraining business spending
- Capital flows keeping long-term interest rates low
- Assumes US will step back from fiscal cliff but can’t be sure
- Says US recovery on a somewhat surer footing
- Significant uncertainty on how quickly China can shift its growth model
- Some evidence global uncertainty is hitting domestic econ, will take this into account in MPR next week.
- Full text
Notably is what he didn’t say: “some modest withdrawal of the present considerable monetary policy stimulus may become appropriate.” It has been the refrain in BOC statements, indicating a hiking bias.
Update: it is so difficult to read between the lines on something that isn’t there. After a read through the speech, it’s not entirely clear that Carney has shifted his stance but all the characterizations are negative so I would estimate an 80% chance that the hiking bias is gone.
USD/CAD now starting to move up a few pips to 0.9793.
