At 10 a.m. today, the Bank of Canada will announce its key rate decision. As such, here is an overview of the Canadian economy since the start of 2017 in a few data points:
- Gross Domestic Product: +3.7% in Q1 2017, +4.3% in Q2 2017 and +1.7% in Q3 2017
- Full-time jobs: Growth of 370,000 since January 2017
- Wages: Average monthly wage growth in 2017 is 1.57% (+2.8% in November)
These data illustrate that the country’s economy has been chugging along at a good pace since the start of the year.
According to our economists, the BoC will be hard-pressed not to stress the sound footing of the economy, but should hold off on raising its key rate. Moreover, we can also expect that risks related to NAFTA and the geopolitical environment will be highlighted in the statement.
Lastly, although the BoC is expected to opt for the status quo this morning, our economists believe that it should still lay the groundwork for monetary tightening as soon as January 2018. Consider this a heads-up to businesses with variable-rate financing.
Julien Duquette
Range of the day: 1.2570 – 1.2745