BoC: On pause but optimistic about domestic economic outlook - NBC

Analysts at National Bank of Canada note that the Bank of Canada left the overnight rate unchanged at 1.75% and said recent economic data was in line with its April projections (Monetary Policy Report) which showed a slowdown in late 2018 and early 2019.

Key Quotes

“Inflation has also evolved as expected by the BoC. The central bank was comforted by “strong job growth” ─ which it says reflects the view of business that the slowdown is temporary ─, as well as a “more stable housing market” and firming business investment. But the central bank acknowledged that global trade risks have increased and hence it decided to remain patient on rates.”

“The BoC remains data dependent and made clear it will be “especially attentive to developments in household spending, oil markets and the global trade environment”.”

“For now, uncertainties about global trade represent a risk that is significant enough to keep the central bank in pause mode. As such, we remain comfortable with our call for rates to remain unchanged through 2019.”