Highlights of the Bank of Canada decision on January 20, 2016:
- Prior overnight rate was 0.50%
- 'Risks to inflation profile are balanced'
- Sees 1.4% growth in 2016 vs 2.0% previously
- Sees 2.5% growth in 2017
- The Bank's current base case projection shows the output gap closing later than was anticipated in October, around the end of 2017
- Prices for oil and other commodities have declined further and this represents a setback for the Canadian economy
- The dynamics of the global economy are broadly as anticipated
- The protracted process of reorientation towards non-resource activity is underway
- The outlook is highly uncertain
- BOC now estimates that real GDP growth stalled in the fourth quarter
- USD/CAD was trading at 1.4618 moments before the decision
- Full text of the BOC decision
- Full text of the MPR
Two important things:
Risks to inflation 'roughly balanced' isn't dovish. However, saying the output gap will close around the end of 2017 compared to around mid-year in the October MPR so that is a bit more dovish. Still, it doesn't imply much more easing.
The closer you look, the less dovish it is. However, this is a key appendix and really sums up the situation. You get the feeling that most of it was written a couple weeks ago.
Bank of Canada Governor Stephen Poloz holds a press conference at 1615 GMT (11:15 am ET).
