BOC: Delivers Expected 25 BPS Trade-War Cut, Signals Cautious Path Forward
Mar-12 13:45
- Bank of Canada cut interest rates for a seventh time in a row, by 25 bps to 2.75% in line with market expectations, amid concerns over U.S. trade war.
- "Looking ahead, the trade conflict with the United States can be expected to weigh on economic activity, while also increasing prices and inflation. Governing Council will proceed carefully with any further changes to our policy rate given the need to assess both the upward pressures on inflation from higher costs and the downward pressures from weaker demand, " Governor Macklem said.
- "Governing Council will be carefully assessing the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs."
- BOC says inflation remains near its 2% target while core inflation is above 2% due to persistent shelter inflation.
- BOC says expectations for short-term inflation have increased amid U.S. tariff concerns.
- "We’re now facing a new crisis. Depending on the extent and duration of new US tariffs, the economic impact could be severe. The uncertainty alone is already causing harm," Macklem says.
- Special BOC survey on businesses and households published Wednesday suggests tariff threats and uncertainty from Canada-US trade relationship are already impacting businesses and consumer confidence.
- BOC says shift in business and consumer intentions could translate to a slowdown in Q1.
- BOC says expectations for medium and long-term CPI must be closely monitored to ensure any rise in inflation is temporary.
- "Monetary policy cannot offset the impacts of a trade war. What it can and must do is ensure that higher prices do not lead to ongoing inflation."
- Next interest rate decision on April 16.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
MNI EXCLUSIVE: MNI interviews S&P analyst on possible tariff effects on autos
Feb-10 13:41
MNI interviews S&P analyst on possible tariff effects on auto sector -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
GLOBAL POLITICAL RISK: Week Ahead 10-16 February
Feb-10 13:30
MNI's Political Risk team has published its Week Ahead article, looking at the major political risk events scheduled for the coming seven days.
Monday 10 February:
- China-US: Following US President Donald Trump’s imposition of 10% tariffs on almost all Chinese products entering the US, Beijing has responded with its own measures as of 10 February. A 15% levy on imports of US coal and LNG, and a 10% tariff on US oil, agricultural machinery and large-engine cars have come into force. With both the US and China having now imposed some form of trade levy on the other, focus will be on whether there is an escalation into an all-out trade war or if this now sets up Washington and Beijing for negotiations.
Full article PDF attached below:
PIPELINE: Corporate Bond Issuance Roundup: Eli Lilly 6Pt on Tap
Feb-10 13:25
- Date $MM Issuer (Priced *, Launch #)
- 02/10 $Benchmark Eli Lilly 3Y +50a, 5Y +65a, 7Y +75a, 10Y +85a, 30Y +105a, 40Y +115a
- 02/10 $Benchmark Textron 10Y +125a
- 02/10 $700M Snap Inc 8NC3 7%a
- For comparison: Eli Lilly issued $5B over 5 tranches last August 8: $750M 3Y +35, $1B 5Y +50, $1.25B 10Y +70, $1.25B 30Y +88, $750M 40Y +100
