Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.LATEST FROM POLICY:
Real-time insight on key fixed income and fx markets.Launch MNI PodcastsFixed Income FI Market AnalysisCentral Bank PreviewsFI PiEurozone/UK Bond Auction CalendarEurozone/UK T-bill Auction CalendarUS Treasury Auction Calendar US$ Credit Supply Pipeline Fixed Income Technical Analysis EGB Issuance, Redemption and Cash Flow Matrix Gilt Week Ahead
- Emerging MarketsEmerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
Real-time insight of oil & gas markets
Reporting on key macro data at the time of release.LATEST FROM DATA:
- MNI ResearchMNI Research
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.Global Macro Central Bank PreviewsCentral Bank ReviewsBalance Sheet AnalysisInflation InsightGlobal IssuanceEurozoneUKUSOverviewGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction Calendar
- About Us
Off Lows As RBA Sees Underlying Inflation Back To Top Of Target In ‘24
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.Free Access
US$ Credit Supply Pipeline
US Treasury Auction Calendar
MNI DATA IMPACT: Text of BOC Decision to Keep Rate at 1.75%>
By Greg Quinn
OTTAWA (MNI) - Text of the BOC decision released Wednesday from
The Bank of Canada today maintained its target for the overnight
rate at 1.75 percent. The Bank Rate is correspondingly 2 percent and
the deposit rate is 1.50 percent.
The global economy is showing signs of stabilization, and some
recent trade developments have been positive. However, there remains a
high degree of uncertainty and geopolitical tensions have re-emerged,
with tragic consequences. The Canadian economy has been resilient but
indicators since the October Monetary Policy Report (MPR) have been
Data for Canada indicate that growth in the near term will be
weaker, and the output gap wider, than the Bank projected in October.
The Bank now estimates growth of 0.3 percent in the fourth quarter of
2019 and 1.3 percent in the first quarter of 2020. Exports fell in late
2019, and business investment appears to have weakened after a strong
third quarter. Job creation has slowed and indicators of consumer
confidence and spending have been unexpectedly soft. In contrast,
residential investment was robust through most of 2019, moderating to a
still-solid pace in the fourth quarter.
Some of the slowdown in growth in late 2019 was related to special
factors that include strikes, poor weather, and inventory adjustments.
The weaker data could also signal that global economic conditions have
been affecting Canada's economy to a greater extent than was predicted.
Moreover, during the past year Canadians have been saving a larger share
of their incomes, which could signal increased consumer caution. This
could dampen consumer spending but help to alleviate financial
vulnerabilities at the same time.
Looking ahead, Canadian business investment and exports are
expected to contribute modestly to growth, supported by stronger global
activity and demand. The Bank is also projecting a pickup in household
spending, supported by population and income growth, as well as by the
recent federal income tax cut. In its January MPR, the Bank projects the
global economy will grow by just over 3 percent in 2020 and 3-1/4
percent in 2021. For Canada, the Bank now forecasts real GDP will grow
by 1.6 percent this year and 2 percent in 2021, following 1.6 percent
growth in 2019.
While the output gap has widened in recent months, measures of
inflation remain around 2 percent. This is consistent with an economy
that, until recently, has been operating close to capacity. The Bank
expects inflation will stay around the 2 percent target over the
projection horizon, with some fluctuations in 2020 from volatility in
energy prices. Meanwhile, labour markets in most regions have little
slack and wages continue to firm.
In determining the future path for the Bank's policy interest rate,
Governing Council will be watching closely to see if the recent slowdown
in growth is more persistent than forecast. In assessing incoming data,
the Bank will be paying particular attention to developments in consumer
spending, the housing market, and business investment.
Information note: The next scheduled date for announcing the
overnight rate target is March 4, 2020. The next full update of the
Bank's outlook for the economy and inflation, including risks to the
projection, will be published in the MPR on April 15, 2020.
--MNI Ottawa Bureau, +1-613-314-9647, firstname.lastname@example.org
To read the full story
Sign up now for free access to this content.
Please enter your details below and select your areas of interest.
Why Subscribe to
MNI is the leading providerof news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.
Our credibilityfor delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.