Macklem’s opening statement was pre-released, these are the highs of the Q&A with the media:
- Core inflation is easing as expected
- Our growth forecast hasn’t changed a great deal
- We’re going to be particularly focused on inflation and growth data
- There was a ‘clear consensus’ on cutting 50 bps today
- Expect there will be further cuts if things unfold as we expect
- Canadian can breathe a sigh of relief
- We’re coming out the other side, our focus now is on sticking the landing
- With inflation close to 2%, Canadians don’t need to worry about increasing costs of living
USD/CAD was trading at 1.3858 as the press conference began, up 40 pips. I believe that with rosy forecasts and no commitments to getting to neutral quicker, the BOC is falling further behind the curve despite a larger cut. The BOC should be at neutral now.
OIS pricing for a December 50 bps cut is at just 7%.
This is a ‘sad’ chart from National Bank.
This article was written by Adam Button at www.forexlive.com. Source