Bank of Canada downgrades growth forecasts more than expected - NBF


At today’s meeting, the Bank of Canada left the key interest rate unchanged as expected at 1.75% today. Krishen Rangasamy and Paul-André Pinsonnault, analysts at National Bank of Canada, point out that their own growth forecast are now, after today’s BoC downgrades, more optimistic. They continue to call for the central bank to extend its pause through 2019.

Key Quotes:

“In the Monetary Policy Report (MPR), the BoC lowered its 2019 Canadian GDP growth forecast by half a percentage point from 1.7% to 1.2%, while leaving 2020 unchanged at 2.1%. The BoC presented its 2021 forecast for the first time, showing a 2.0% growth rate in that year. Growth in the first quarter of 2019 is estimated at just 0.3% annualized, followed by 1.3% in Q2. Downgrades to 2019 (compared to January’s MPR) were largely due to housing and business investment. Forecasts of inflation were raised to reflect higher oil prices.” 

“While the no-change decision was widely expected, the downgrade to the BoC’s 2019 GDP growth forecast for Canada was much larger than anticipated. The BoC’s 1.2% forecast for 2019 growth is now well below consensus which is roughly 1.5%. The tone of the statement was more dovish than last March. Gone is the reference to “the timing of future rate increases”. 

“The central bank opted to drop its tightening bias, saying instead that it will monitor incoming data to gauge the extent to which factors weighing on growth and inflation are dissipating, in light of which it will evaluate the appropriate degree of monetary policy accommodation. In other words, the BoC opened the door to the possibility of rate cuts should the second half of the year also disappoint. Our own Canadian growth forecast, like consensus, is more optimistic than the BoC’s. As such, we continue to call for the central bank to extend its pause through 2019.”

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD bouncing modestly on disappointing US Consumer Confidence

The shared currency remains pressured by the idea that the ECB will come out with massive stimulus measures in September. US Michigan Consumer Confidence down to 92.1 brakes dollar's gains.

EUR/USD News

GBP/USD retreats sharply after approaching 1.2200

The GBP/USD pair came under selling pressure after flirting with weekly highs, as a dismal US confidence report brought back risk-off. GBP/USD still up for the week and above the critical 1.2100 level.

GBP/USD News

USD/JPY: Greenback makes modest progress against Yen, near 106.30

The demand for Yen as a safe-haven currency has been weak in the last three days. The levels to beat for bulls are at the 106.30 and 106.55 resistances.

USD/JPY News

Gold gives back territory towards a 23.6% retracement

Gold prices were a touch lower by the end of the week, falling -0.68% having travelled between a high of $1,528.00 to a low of $1,503.87, ending the NY session around $1,513. 

Gold News

Four Signs of A Bear Market

I am a believer that the Universe gives you signs. That may sound a bit crazy, but these three charts are three more signs of a bear market. The top chart is the GLD exchange traded fund.

Read more

MAJORS

Cryptocurrencies

Signatures


  •  
  •  
  •  
  •  
  •