BOCs Macklem: We need additional info before we consider moving to more balanced policy

The BOCs Tiff Macklem is speaking on the economy and policy

• We need additional information before we consider moving to a more finely balanced decision by decision approach
• more rate hikes will be needed
• there is more to be done on inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term
• inflationary pressures have yet to ease
• we haven't yet to see clear evidence that underlying inflation in Canada has come down
• domestic inflationary pressures have yet to ease
• even after stripping out CPI components that are volatile or don't reflect generalized price changes, inflation is running at about 5%. That's too high
• forward-looking indicator suggests Canadian economy is slowing
• labor markets remain tight and economy is in excess demand
• recent declines in overall Canadian inflation is welcome news but inflation will not fade away by itself
• inflation increasingly reflects what we are seeing in Canada, there is some evidence global inflationary pressures have begun to ease
• survey shows consumers and businesses are more uncertain about inflation and more of them expected to be higher for longer
• so far longer-term inflation expectations remain reasonably well anchored
• Canadians will need to see inflation clearly coming down to sustain this confidence
• recent depreciation of Canadian dollar vs. US dollar US Dollar The US dollar, (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most widely traded currency globally. It was introduced into the US in the late 18th Century, with paper notes not being distributed until the following century. The US dollar, also informally known as the greenback, is the world’s most foremost reserve currency, due in large part to the importance of the US economy on the world stage. Once backed by gold (in the 1900’s), the USD is now a purel The US dollar, (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most widely traded currency globally. It was introduced into the US in the late 18th Century, with paper notes not being distributed until the following century. The US dollar, also informally known as the greenback, is the world’s most foremost reserve currency, due in large part to the importance of the US economy on the world stage. Once backed by gold (in the 1900’s), the USD is now a purel Read this Term will offset some of the global improvement in inflation trends by making US goods and vacations more expensive
• thank will focus more on the CPI trim and CPI median measures of inflation
• bank is reassessing CPI, and measure, which is becoming more difficult to use

The comments are more hawkish with the theme of killing inflation still the major theme. That has not been done yet. The USDCAD has dipped modestly but remains near the highs for the day. The pair is up 0.8% on the day. Earlier today, the price based against the 100 hour moving average and then raced above its 200 hour moving average currently at 1.36726. That moving average level is a risk defining level for buyers looking for more upside. For sellers, getting below back below that moving average would increase the bearish bias.

Tomorrow, both the US and Canada will release their employment data. For Canada, the expectations are for an employment change of 19.5K after a -39.7K decline last month. The unemployment rate is expected to remain steady at 5.4%.

In the US the nonfarm payroll is expected to rise by 265K vs. 315K last month. Average hourly earnings are supposed to rise by 0.3%, and the unemployment rate is expected to remain steady 3.7%.

When both the US and Canada release their jobs on the same day the focus tends to be on the USD side of the equation. As a result traders will be focused on the technical levels in play.