The Canadian economy is alive and well and will continue to grow. This will be near-term positive for the Canadian dollar. |
The commodity play is a big part of the story there. |
The intent of that, in my view, is to say they are very cautious about looking forward. A rate hike should not be expected in the same vein that one was expected for today. |
The manufacturing sector continued to struggle. And in light of the sour business conditions survey ... that trend appears likely to continue. |
The most notable (change) is the insertion of the word 'modest.' And that's been interpreted in a dovish fashion. |
There are some weak spots in the report and that's what the market is responding to. |
There is huge strength in employment ? It shows continued strength in the labor market, which supports the Canadian dollar. The Bank of Canada may look closely at this number and sit up and think about whether they should increase interest rates further. There is probability they may go beyond 4 percent. |
There's no question manufacturers are paying the piper in some sense, in that they did get away with a lot over the 1990s when the Canadian dollar was weak. |
This ... suggests that the bank is well aware that the six consecutive hikes ... have a cumulative impact that has not yet been fully felt. |
This report was largely in line with expectations. It was a grim report. |
Today's report poured some further cold water on the outlook for the Canadian manufacturing sector, not that it needed any cooling off to begin with. |
Today's twin reports provide a further excuse for the Bank of Canada to halt at 4.0 percent after next week's hike. |
We certainly do think there are another two (rate hikes) left in the Bank of Canada before they tag out. |
We did have a weak University of Michigan confidence index ... but on the flip side, you had the producer price index, which came in a little strong. |
We've been told before that this is the Bank of Canada's favorite measure. So, the Bank of Canada, without question, is going to sit up quite closely and look at this release. |