Bank of Canada’s Toni Gravelle will be speaking at 12:50 PM ET.
The Bank of Canada kept rates unchanged yesterday.
Highlights from the statement:
- The Bank of Canada maintained its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%.
- The Bank is continuing its policy of quantitative tightening.
- The global economy is slowing, and inflation is easing further. The United States shows stronger growth, but it’s expected to weaken. Growth in the euro area has weakened, reducing inflationary pressures. Oil prices are lower than previously assumed.
- Financial conditions have eased, with a decrease in long-term interest rates and a weakening of the US dollar against most currencies, including Canada’s.
- In Canada, economic growth stalled in the middle quarters of 2023. Real GDP contracted by 1.1% in the third quarter. High interest rates are restraining spending, with consumption growth and business investment being flat.
- Exports and inventory adjustments subtracted from Canada’s GDP growth in the third quarter, while government spending and new home construction had positive impacts.
- The labor market is easing, with slower job creation, declining job vacancies, and a slight rise in unemployment. Wages are still increasing by 4-5%.
- The economic slowdown is reducing inflationary pressures across various goods and services. CPI inflation eased to 3.1% in October, but shelter price inflation has increased.
- Core inflation measures have been around 3½-4%, with recent data trending towards the lower end.
- The Governing Council decided to hold the policy rate at 5% and continue normalizing the Bank’s balance sheet, prepared to raise the rate further if needed.
- The Bank is focused on balancing demand and supply, inflation expectations, wage growth, and corporate pricing behavior, and remains committed to restoring price stability for Canadians.
The USDCAD has traded up and down today. The high price in the early North American session moved to a high of 1.36186. That was about 4 pips short of the 38.2% retracement target of the move down from the November 10 high at 1.36224.
The low prices today reached 1.35836. That was around 6 pips short of the 100-day moving average at 1.35782. The current price is trading at 1.3600.
