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CANADA: Macklem Text Released at 0815ET

CANADA
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  • BoC Governor Macklem speaks on the “Impact of AI on productivity, on labour markets and price-setting behaviour”, with text released at 0815ET.
  • The speech itself starts at 0830ET and is followed by an audience Q&A but there isn’t scheduled media availability afterwards.
  • If he does speak on monetary policy, we expect a continuation of comments that reflect a low bar to further cuts whilst perhaps a discussion of scenarios that include both pausing or upsizing cuts to 50bps vs sticking with current 25bp clips.
  • There is ~38bp of cuts priced for the Oct 23 meeting, but with many important releases to be seen before then including September labour and CPI reports, monthly GDP and the Q3 BOS/CSCE surveys.
  • Since the BoC cut 25bps for a third consecutive meeting on Sep 4, jobs growth broadly met expectations but still saw a larger than expected increase in the u/e rate. It was followed by CPI surprising a tenth lower to leave it exactly at the 1-3% target mid-point for the first time this cycle whilst core metrics were as expected at an average 2.35% Y/Y.
  • In an unusually busy week for BoC-speak, Senior Dep Gov Rogers followed CPI by saying there is “still work to do” on inflation with the Bank wanting to see core measures come down.
  • She was followed by Dep Gov Vincent noting that some had misunderstood the Bank’s July comments on downside risk – the Bank didn’t mean that downside risk had strengthened but rather that it’s putting more weight on the risk of undershooting the inflation target after the disinflationary progress made. Macklem had also looked to emphasise that in post-decision commentary earlier this month. 
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  • BoC Governor Macklem speaks on the “Impact of AI on productivity, on labour markets and price-setting behaviour”, with text released at 0815ET.
  • The speech itself starts at 0830ET and is followed by an audience Q&A but there isn’t scheduled media availability afterwards.
  • If he does speak on monetary policy, we expect a continuation of comments that reflect a low bar to further cuts whilst perhaps a discussion of scenarios that include both pausing or upsizing cuts to 50bps vs sticking with current 25bp clips.
  • There is ~38bp of cuts priced for the Oct 23 meeting, but with many important releases to be seen before then including September labour and CPI reports, monthly GDP and the Q3 BOS/CSCE surveys.
  • Since the BoC cut 25bps for a third consecutive meeting on Sep 4, jobs growth broadly met expectations but still saw a larger than expected increase in the u/e rate. It was followed by CPI surprising a tenth lower to leave it exactly at the 1-3% target mid-point for the first time this cycle whilst core metrics were as expected at an average 2.35% Y/Y.
  • In an unusually busy week for BoC-speak, Senior Dep Gov Rogers followed CPI by saying there is “still work to do” on inflation with the Bank wanting to see core measures come down.
  • She was followed by Dep Gov Vincent noting that some had misunderstood the Bank’s July comments on downside risk – the Bank didn’t mean that downside risk had strengthened but rather that it’s putting more weight on the risk of undershooting the inflation target after the disinflationary progress made. Macklem had also looked to emphasise that in post-decision commentary earlier this month.