BoC Poloz reiterates concerns in yesterday's statement - offers little relief to CAD
The governor has released his prepared statement at the press conference today, where the overwhelming signal is that the pace of rate hikes next year will be data dependent - this is a reiteration, yet are being taken as negative in light of some of the weak numbers of late. Indeed, the governor has admitted that the data recently has been disappointing and that the economy has had less momentum heading into Q4 than was previously expected.
The central bank has naturally been concerned over the drop in oil prices, which are now below projections from the MPR (Monetary Policy Review), with the added fear that demand from here on out could be further dampened by moderating global demand - some of it down to trade tensions.
Low oil prices will involve a painful adjustment in Western Canada Select prices, which have already been hit hard by pipeline/delivery issues. All in all, there is little here to change the perception over the statement released yesterday, with CAD maintaining a heavy tone as a result.
Adding to negative sentiment is a lower than expected trade balance for Oct, which has come in at -C$1.17bln vs a -C$0.7bln deficit, widening out from the Sep reading of -C$0.89bln.
The focus is now on oil price, where WTI has again tested towards $50.0, so from here, comments on potential production cuts will be influential, up until the next key domestic data which comes out tomorrow in the form of the Nov employment report.