BoC is unlikely to alter their stance much when they meet 9 Sep - Westpac

Richard Franulovich, Research Analyst at Westpac, suggests that key Canadian data has underwhelmed recently, June’s trade deficit of $C3.6bn the largest on record, while the 131k fall in full-time employment in May-June is the weakest consecutive two months for full time jobs growth since 2009.

Key Quotes

“We assume that these weak data are the last vestiges of the Fort McMurray wildfire disruptions. Still solid house price data, decent manufacturing shipments for June and higher oil prices provide some reassuring offset. Moreover, Q3 should show the much hoped for growth bounce back (the BoC assumes 3.5% growth in Q3) and fiscal stimulus kicks in from Q4 onward.

The BoC should agree and is unlikely to alter their stance much when they meet 9 Sep. USD/CAD is a sell into 1.32 if seen.”