Bond sales by Canadian provinces surged in the third quarter to the highest in almost a decade as borrowers took advantage of record-low interest rates and steady investor appetite to raise funds.
The Bank of Montreal reduced its forecast for how fast Canada’s central bank will raise its key interest rate, citing Europe’s debt crisis and evidence of sluggish U.S. economic growth.
Bank of Canada Senior Deputy Governor Tiff Macklem, who may be promoted to lead the central bank later this year, said economic growth is slower than expected and will accelerate later this year.
Governor Mark Carney is closing the door on liquidity programs the Bank of Canada started during the credit crisis, just as the Federal Reserve may expand asset purchases to sustain the U.S. economic recovery.
The Bank of Canada kept its benchmark interest rate unchanged, and policy makers said they will carefully consider future increases in a recovery that is “slightly faster” than they forecast.
Canada’s gross domestic product rose for a second month in July on gains in manufacturing and wholesaling, enough to avert a recession in the third quarter, economists said.
Inventories in the U.S. rose 0.4 percent in April, less than the gain in sales, putting companies in a better position to weather a slowdown in demand last month.
"It's steady as she goes for Bank of Canada policy."
- Michael Gregory on Dec 03, 2014
Bloomberg Surveillance: Dutta and Gregory on Economy