Hold press conference after release of the Financial System Review
The BOCs Poloz and Wilkins are holding a press conference following the release of the Financial System review.
- Stronger economy helping households weather higher rates
- Household debt to be with us for a long time
- We do expect the housing market to stabilize
- Tariffs mean consumers will pay more for many things
- Everybody loses when trade is reduced
- BOC forecasts already capture trade uncertainty
- Will include US steel, aluminum tariffs into July MPR forecast
- Trade risk is our number one risk in context of monetary policy frame
- Trade risk feels a little more risky today than it did at the last policy statement.
- Confident consumers will start paying more for many things that will have direct impact on inflation and spending power
- Confidence in our narrative, in inflation wages continue to improve.
The USDCAD remains above the 100 and 200 hour MAs at 1.29438 and 1.29527 respectively. The high remains at 1.2989. The 1.3000 area is a key level to get and stay above on the topside on more momentum.
There are crosswinds for the CAD today though. Oil prices are higher by over $1 now (or 1.64%), but the negative from trade remains a risk, although Poloz/Wilkins are not sounding alarms – yet.
The probability of a hike for the July meeting tumbled toward the 50% level before the BOC meeting on May 30th. However, Gov Poloz and the BOC gave an upbeat assessment of the economy and removed some cautious language at that meeting and the probability of a hike shot higher. The expectations are now for a 78.5% chance for a hike despite the trade worries.
The BOC meets on July 11th.