The Bank of Canada said there’s evidence the global economy is stabilizing, while the domestic economy remains resilient, in an interest rate decision Wednesday that gave little indication policy makers are in a rush to lower borrowing costs.The Ottawa-based central bank held its policy rate at 1.75 per cent for a ninth consecutive meeting, retaining language from its previous statement that it judges the current interest rate is “appropriate.” The prolonged pause has left Canada with the highest policy rate among advanced economies.
It was fully expected that the BoC would leave rates unchanged, what analysts were looking for was what the BoC had to say about the economy. Today’s headlines out of Toronto showing that house prices are rising and there seems to be the possible start of further demand, gives the BoC reason not to cut. If the U.S.-China trade talks ever come to a conclusion, then the impact to Canada would be significant.
Oil prices jumped over 4% on the back of lower than anticipated inventory levels, and expectations of production cuts from the OPEC meetings that start tomorrow. OPEC’s biannual meeting kicks off Thursday in Vienna, where the 14-member group will discuss the next phase of their oil production policy. On Friday, OPEC and its allies — known as OPEC+ and which includes Russia — will meet. OPEC+ has cut output by 1.2 million barrels per day since the beginning of the year. The current deal runs through March of 2020.
The Canadian dollar is stronger to the USD due to the BoC and oil, we are now in a new trading range, expect 1.3175-1.3230.