BOC: Holds 2.75% Rate, May Cut If Inflation And Growth Slow Amid Tariffs
Jul-30 13:45
- Bank of Canada holds 2.75% rate for third time in a row as expected by all economists.
- BOC decision says could cut "if a weakening economy puts further downward pressure on inflation and the upward price pressures from the trade disruptions are contained." At the prior meeting the Governor's press statement said could cut if the economy weakens and "cost pressures on inflation are contained."
- BOC says Canada economy showing some resilience even amid US tariffs.
- Due to trade uncertainty the Bank gave three economic scenarios-- current tariffs, escalation and de-escalation.
- Current tariff scenario shows Q2 annualized GDP will be -1.5%, and Q3 +1%. Core inflation in Q3 and Q4 seen at 3.1%.
- "The lack of a conventional forecast does not impede our ability to take monetary policy decisions. But the unusual degree of uncertainty does mean we have to put more weight on the risks, look over a shorter horizon than usual, and be ready to respond to new information," Governor Macklem said Wednesday.
- BOC says underlying inflation accelerated to around 2.5% recently from about 2% in H2 last year with shelter costs the biggest driver.
- BOC says CAD appreciation lowering import costs.
- "We need to proceed carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases from tariffs and trade disruptions are passed on to consumer prices; and how inflation expectations evolve," Macklem said.
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US DATA: Chicago Business Barometer™ - Held At 40.4 In June
Jun-30 13:45
The Chicago Business Barometer™, produced with MNI, fell 0.1 points to 40.4 in June. The index is now 7.2 points below March’s year-to-date high of 47.6 and has now been below 50 for nineteen consecutive months.
- The slight decrease was driven by a fall in Supplier Deliveries, Production, Employment and Order Backlogs. This was almost fully offset by a rise in New Orders.
- New orders rebounded 4.1 points, but remain below the year-to-date average. The increase was driven by a lower proportion of respondents reporting fewer new orders compared to May.
- Supplier deliveries eased 6.8 points.
- Production pared 2.7 points to 41.2. This was the third consecutive decline, with the index now at its lowest since January.
- Employment retraced 3.9 points to 42.0, but sees the second highest reading of 2025.
- Order backlogs softened 1.5 points to the lowest level since May 2020. Only 4% of respondents reported larger backlogs in June, the second smallest percentage on record and the lowest since 1980.
- Inventories moderated 8.0 points.
- Prices paid climbed 8.3 points to 84.8, the highest level since May 2022. 70% of respondents reported higher prices paid in June, up from 57% in May.
- The survey ran from June 1 to June 16.
MNI: MNI JUN CHICAGO BUSINESS BAROMETER 40.4 VS MAY 40.5
Jun-30 13:45
- MNI JUN CHICAGO BUSINESS BAROMETER 40.4 VS MAY 40.5
- MNI CHICAGO: JUN PRICES PAID 84.8 VS MAY 76.5
- MNI CHICAGO: JUN EMPLOYMENT 42.0 VS MAY 45.9
- MNI CHICAGO: JUN PRODUCTION 41.2 VS MAY 43.9
- MNI CHICAGO SURVEY PERIOD JUN 1 TO 16
EQUITIES: US Cash Opening calls - Set for new record highs
Jun-30 13:28
US Cash Opening calls, set for new record highs.
SPX high on Friday was at 6187.68, NDX 22,603.22
- Calls: SPX: 6,207.5 (+0.6%); DJIA: 44,124 (+0.7%/+305pts); NDX: 22,700.8 (+0.7%)
