BoC Business Outlook Survey shows comfort with the status quo - TD Securities

Eren Sengezer FXStreet

Assessing the Bank of Canada's Business Outlook Survey (BOS) for the second quarter, TD Securities macro strategist Robert Both said it was surprisingly upbeat and added that it showed a strong increase in future sales expectations despite an increasingly murky global backdrop.

"The balance of opinion around business investment was unchanged at +20, and firms continue to report broad hiring plans as shown by a slight increase in future employment levels, despite the 127k jobs added since the April BOS. Together, these developments helped drive an improvement in the BOS (PCA) Indicator which firmed to +0.2 from -0.6 in April."

"While trade tensions featured prominently in the previous report, the July BOS partially downplayed the impact of global uncertainty. Foreign demand was seen as a strong factor underpinning future sales growth, even with an increase in the number of firms who expect a negative impact from trade policy."

"Markets should take this report with a grain of salt given the G20 backdrop and potential for a significant shift in global trade tensions over the next 48 hours, but barring a significant deterioration in the US/China relationship the Bank of Canada looks increasingly determined to hold the line."

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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