BOC: Firms See Less Grim Growth Outlook Amid Tariffs, Inflation Pressure
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Bank of Canada Deputy Governor Kozicki says Bank's findings show companies see a less devastating outlook despite U.S. tariff hit. "Overall, firms believed that their worst-case tariff scenarios were much less likely to materialize than they reported earlier this year. While uncertainty remains high, there was less talk of catastrophic outcomes," Kozicki says in Toronto speech.
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On top of traditional sources, Governing Council took into account more non-traditional data in its rate decision Wednesday. BOC held its key rate steady at 2.75% and signaled a potential cut later if the economy weakens and inflation remains contained.
- "We are looking at different metrics to round out our analysis of tariff implications. These include the number of trucks crossing the border, and the volume of ships entering and leaving ports in both Canada and the United States," Kozicki says. "The number of trucks crossing the border both to and from the United States dropped sharply in April."
- Surveys with data through May confirmed downward trend in business sentiment in Q1. Exporters' sales sentiment also tumbled. Polls show consumers' inflation expectations over 1-2 years have increased.
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OPTIONS: Larger FX Option Pipeline
- EUR/USD: May08 $1.1200(E2.5bln), $1.1250(E1.5bln), $1.1390-00(E3.0bln), $1.1420-25(E1.3bln); May09 $1.1300(E1.3bln), $1.1375-85(E954mln), $1.1400-10(E1.1bln)
- USD/JPY: May08 Y142.00($1.1bln), Y143.00($1.6bln), Y145.00($1.3bln); May09 Y145.00($1.8bln); May12 Y142.45-50($1.0bln)
- USD/CAD: May09 C$1.3700($1.2bln), C$1.3750($1.2bln)
- USD/CNY: May08 Cny7.4500($1.5bln)
US 10YR FUTURE TECHS: (M5) Pierces Support At The 50-Day EMA
- RES 4: 113-22 1.382 proj of the Apr 11 - 16 - 22 price swing
- RES 3: 113-04 76.4% retracement of the Apr 7 - 11 bear leg
- RES 2: 112-20+ High May 1 and key new-term resistance
- RES 1: 112-01+ High May 2
- PRICE: 111-04 @ 17:05 BST May 6
- SUP 1: 110-27+ Intraday low
- SUP 2: 110-16+/109-08 Low Apr 22 / 11 and the bear trigger
- SUP 3: 110-00 100-dma
- SUP 4: 108-26+ 76.4% retracement of the Jan 13 - Apr 7 bull cycle
The latest pullback in Treasury futures undermines the recent bull cycle. The contract has breached the 20-day EMA, and pierced support at the 50-day EMA, at 110-30+. A clear breach of this average would strengthen a bearish threat and expose 110-16+, the Apr 22 low. For bulls, price needs to trade above key short-term resistance at 112-20+, the May 1 high, to reinstate a bullish theme.
FED: US TSY TO SELL $85.000 BLN 4W BILL MAY 08, SETTLE MAY 13
- US TSY TO SELL $85.000 BLN 4W BILL MAY 08, SETTLE MAY 13
