MNI 5 THINGS:BOC Delivers on Status Quo;Growing Trade Concerns>

By Yali N'Diaye

     OTTAWA (MNI) - Following are the key points from the Bank of 

Canada's interest rate announcement Wednesday:

     - The BOC kept the overnight rate target unchanged at 1.25%, as 

widely expected and priced in by markets. Repeats its "cautious" and 

data dependent approach. Repeats January's conclusion that "While the 

economic outlook is expected to warrant higher interest rates over time, 

some continued monetary policy accommodation will likely be needed to 

keep the economy operating close to potential and inflation on target." 

     - Voiced increasing concerns related to trade policy developments, 

which are "an important and growing source of uncertainty for the global 

and Canadian outlooks." The January statement said NAFTA-related 

uncertainty was clouding the outlook. 

     - The BOC did not take the weaker January housing data as a sign of 

a beginning of a sharp downfall, since new regulations in effect since 

January had pushed households to rush into home buying at the end of 

2017, followed by a drop in January. BOC said "it will take some time to 

fully assess the impact" of tighter federal mortgage rules and recent 

provincial measures on housing demand and prices. 

     - While acknowledging 4Q GDP was weaker than the BOC's projection, 

the central bank said data confirmed its 2017 estimate of a 3% growth. 

But the BOC noted that higher imports in 4Q reflected stronger business 

investment, "which adds to the economy's capacity." This is important as 

the evolution of capacity is one of the key developments high on teh 

radar screen. 

     - On inflation, the BOC acknowledged core measures have edged up as 

well as wage growth. But points that inflation is fluctuating due to 

temporary factors, including minimum wage increases in January. Overall 

it repeats inflation is close to its 2% target. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com

[TOPICS: M$C$$$,MACDS$]