{"id":41324,"date":"2018-12-05T15:53:44","date_gmt":"2018-12-05T20:53:44","guid":{"rendered":"https:\/\/olduvai.ca\/?p=41324"},"modified":"2018-12-05T15:53:44","modified_gmt":"2018-12-05T20:53:44","slug":"loonie-slumps-as-bank-of-canada-folds-on-economic-enthusiasm","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=41324","title":{"rendered":"Loonie Slumps As Bank Of Canada Folds On Economic Enthusiasm"},"content":{"rendered":"<div id=\"block-zerohedge-page-title\" class=\"block block-core block-page-title-block\">\n<h3 class=\"page-title\"><a href=\"https:\/\/www.zerohedge.com\/news\/2018-12-05\/loonie-slumps-bank-canada-folds-economic-enthusiasm\"><span class=\"field field--name-title field--type-string field--label-hidden\">Loonie Slumps As Bank Of Canada Folds On Economic Enthusiasm<\/span><\/a><\/h3>\n<\/div>\n<div id=\"block-zerohedge-content\" class=\"block block-system block-system-main-block\">\n<article class=\"node node--type-article node--view-mode-full\" role=\"article\" data-gtm-vis-recent-on-screen-2077925_22=\"1588\" data-gtm-vis-first-on-screen-2077925_22=\"1588\" data-gtm-vis-total-visible-time-2077925_22=\"100\" data-gtm-vis-has-fired-2077925_22=\"1\">\n<footer class=\"node__meta\">\n<div class=\"submission-wrapper\"><\/div>\n<\/footer>\n<div class=\"node__content\">\n<div class=\"clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item\">\n<p>Amid near-record-low Canadian crude prices and a housing crisis, The Bank of Canada appears to have finally given up its narrative that &#8216;everything is awesome&#8217;.<\/p>\n<p>The BoC walked back much of its enthusiasm about the nation\u2019s outlook in a decision that kept interest rates unchanged, spinning bad news as good by saying that the economy may have &#8220;additional room for non-inflationary growth.&#8221; Of course, if the economy was growing faster, the BOC would simply say that the economy is growing&#8230; well, faster or &#8220;near potential.&#8221;<\/p>\n<p>Instead, holding rates unchanged at 1.75%, the BOC cited almost everything that has gone wrong:<\/p>\n<div class=\"apester-loading-container apester-hidden\"><\/div>\n<ul>\n<li><em>moderating global growth, <\/em><\/li>\n<li><em>a \u201cmaterially weaker\u201d outlook for the oil sector, <\/em><\/li>\n<li><em>a faster-than-expected deceleration of inflation, <\/em><\/li>\n<li><em>a drop in business investment and downward historical revisions to output<\/em><\/li>\n<\/ul>\n<p>Following the latest central bank dovish relent, the USDCAD jumped 0.8% to ~1.3374 after touching highest (i.e. the CAD dropping the most) in more than five months on the cautious language,<strong> a dovish outlook that could change expectations for 2019 BOC rate hikes. <\/strong><\/p>\n<p><a href=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/2018-12-05_7-01-21.jpg?itok=r0W3boh6\" data-image-external-href=\"\" data-image-href=\"\/sites\/default\/files\/inline-images\/2018-12-05_7-01-21.jpg?itok=r0W3boh6\" data-link-option=\"0\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/2018-12-05_7-01-21.jpg\" srcset=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/styles\/inline_image_desktop\/public\/inline-images\/2018-12-05_7-01-21.jpg?itok=r0W3boh6 1x\" alt=\"\" width=\"500\" height=\"248\" data-entity-type=\"file\" data-entity-uuid=\"8525f414-929a-46f5-8cc7-f8d11fd07ff8\" data-responsive-image-style=\"inline_images\" \/><\/a><\/p>\n<p>Even with the dovish undertones, the statement reiterated that rates will need to rise to &#8220;neutral range&#8221; &#8211; which like the Fed it has no idea what it is &#8211; within its discussion of recent downside risks, to wit:<\/p>\n<blockquote><p>&#8220;Governing Council continues to judge that the policy interest rate will need to rise into a neutral range to achieve the inflation target.&#8221;<\/p><\/blockquote>\n<p>Still, the generally less-confident tone is an acknowledgement of developments over the past few weeks that have <strong>cast doubt on the strength of the nation\u2019s expansion <\/strong>and prompted investors to scale back the expected pace of future rate increases.<\/p>\n<p>The final nail in the hawkish case coffin was the key shift in tone (red rectangle below) which notes that while the Canadian economy growing in line with expectations, <em><strong>&#8220;data suggest less momentum going into the fourth quarter.&#8221;<\/strong><\/em><\/p>\n<p><a href=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/2018-12-05_7-07-04.jpg?itok=vyboMUHI\" data-image-external-href=\"\" data-image-href=\"\/sites\/default\/files\/inline-images\/2018-12-05_7-07-04.jpg?itok=vyboMUHI\" data-link-option=\"0\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/2018-12-05_7-07-04.jpg\" srcset=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/styles\/inline_image_desktop\/public\/inline-images\/2018-12-05_7-07-04.jpg?itok=vyboMUHI 1x\" alt=\"\" width=\"500\" height=\"522\" data-entity-type=\"file\" data-entity-uuid=\"7403eec6-e2be-45f2-8e84-8a7af51eca46\" data-responsive-image-style=\"inline_images\" \/><\/a><\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Loonie Slumps As Bank Of Canada Folds On Economic Enthusiasm Amid near-record-low Canadian crude prices and a housing crisis, The Bank of Canada appears to have finally given up its narrative that &#8216;everything is awesome&#8217;. The BoC walked back much of its enthusiasm about the nation\u2019s outlook in a decision that kept interest rates unchanged, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[942,103,1861,431,2446,534,1278,4318],"class_list":["post-41324","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-canada","tag-canada","tag-canadian-dollar","tag-interest-rates","tag-loonie","tag-monetary-policy","tag-oil-industry","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41324","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=41324"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41324\/revisions"}],"predecessor-version":[{"id":41325,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41324\/revisions\/41325"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}