BoC content to maintain a steady policy hand – Westpac
|Westpac analysts note that the BoC has sat on the sidelines for almost a year, their policy rate steady at 1.75% since late Oct 2018, having raised it +125bp in the prior fifteen months.
Key Quotes
“The Bank is wary about the global outlook and escalating trade tensions, their latest statement noting they will, “pay particular attention”. But the Bank has made no mention about the possibility of cutting rates, BoC officials taking comfort in rebounding domestic activity.”
“Against that background the BoC has struck a neutral tone noting that, “…the current degree of monetary policy stimulus remains appropriate.”
“Markets have got the message loud and clear, pricing in just 14bp in BoC easing to mid-2020, a notable outlier vs peers.”
“The outcome of the federal election (21 Oct) won’t materially alter the outlook though at the margin sentiment could see a bigger lift if the more business-friendly conservative opposition wins.”
“The BoC is anticipating a growth moderation in H2 but activity is likely to hold near trend, leaving the BoC content to maintain a steady policy hand further still into 2020.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.