Surprising gains in output and inflation will probably keep Bank of Canada Governor Stephen Poloz from signaling looser monetary policy again after the central bank sent dovish messages on its last three announcement dates.
The Bank of Canada may drop its bias for raising interest rates as a slowing global economy reduces demand for the nation’s exports such as metals and fertilizer, ending its outlier status among the Group of Seven.
Canada was the envy of developed economies following the global recession, boasting the world’s soundest banks and a robust housing market that helped push its currency above parity with the U.S. Those days are gone.
Employment and housing figures released today confirm that Canada’s economy is cooling faster than the central bank had forecast, indicating the Bank of Canada will refrain from raising interest rates until next year, economists said.
Canadian factory sales unexpectedly fell in June, with the third decline in four months underlining the struggles faced by exporters in rebuilding sales even as the U.S. economy shows signs of strengthening.