According to National Bank of Canada analyst, Matthieu Arseneau, the Bank of Canada does not need to introduce more monetary stimulus considering the current Canadian economic outlook. The main risk is an escalation in the trade war.
Key Quotes:
“With several central banks pivoting towards monetary stimulus, markets are betting that the Bank of Canada will soon jump on the bandwagon.”
“Canada remains in the opposite camp with positive economic surprises and higher than expected inflation. The Canadian economy may have registered the strongest growth among G7 countries in Q2.”
“Private sector job creation in 2019 is the strongest since 2011, core inflation is right on the central bank’s target, and risks to the housing sector have faded with sales bouncing back strongly in recent months on the back of declining mortgage rates.”
“Unless the trade conflict between the Unites States and China escalates further, there is no need for monetary stimulus in Canada.”
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