Canadian bank cuts 2016 growth estimate to 1.5% from 1.7%
CIBC says fourth quarter growth in Canada was likely flat and that the slog will continue in 2016 because of low commodity prices. Their forecast, however, remains higher than the 1.4% Bank of Canada estimate.
An important caveat is government spending. The new federal government has backed away from deficit promises and CIBC's forecast relies on an additional $10 billion in stimulus beyond what was in the election platform and a $30 billion budget.
CIBC is targeting USD/CAD at 1.45 by end of Q1 but recovering to 1.34 by end of the year. They say the loonie could head back towards year-to-date lows if the Federal Reserve decides to hike rates again in March.
It's been a wild trade in CAD today as swings in oil and sentiment drive moves. The latest mini-thrust is higher as stock markets fade again.
