CIBC Research discusses its reaction to today's BoC policy statement.
"With little time to fully digest the weaker than expected GDP figures last week, and no new forecasts to accompany today's decision, the Bank of Canada made few changes to its overall assessment of the economic outlook in today's statement. Of course, it had to acknowledge that growth appears weaker than it had previously assumed, although it noted that the contraction in Q2 was "largely" due to weakness in exports stemming from supply chain disruptions. Those same bottlenecks, as well as base effects from the prior year, also factored into its continued assessment that the recent strength in inflation is "transitory"," CIBC notes.
"In terms of QE, the target pace was maintained at $2bn per week, and investors will now be eyeing Governor Macklem's speech tomorrow, entitled "QE and the reinvestment phase" for details as to how the Bank will continue to wind down this program. Of course, the target for the overnight rate was maintained at 0.25%," CIBC adds.