Comments from the BOC's Wilkins:
- Reiterates degree of accommodation remains appropriate
- Expects Canadian business investment to expand gradually overall
- Investment should be led by firms outside oil and gas industry
- Recent data reinforce view that recent slowdown temporary
- Overall inventories have increase sharply and to the extent this is unplanned, it may dampen production in some sectors later this year
- Developments on the trade file have been discouraging, sees potential for more friction between US and EU
- BOC discussed signals it should take from the inverted yield curve
- Developments in yield curve partly reflect change in tone from central banks and possibly investor appetite for longer-date securities
- Curtailments and bottlenecks in Canadian oil should ease over time as rail and pipelines expand
- Flooding and forest fires could add some choppiness to economic data
The reaction in the Canadian dollar has been muted. There isn't any kind of hint here about what the BOC is going to do next. If anything, they're signaling less worry about inflation, the yield curve and trade than the Fed but it will be months before either acts.
