Residential Market Commentary - Week of August 8, 2017
2017-08-10 | 10:06:38
BoC's silence is loud and clear
Even when the Bank of Canada says nothing it still speaks loud and clear.
The central bank has gone quiet since its first rate hike in seven years, last month. In the run-up to that announcement, and in the days following it, there was a lot of chatter. The Bank did not want the increase to come as a surprise, as some of its previous rate-cut announcements did.
For now the deafening silence is being interpreted by analysts as a sign that the Bank of Canada is OK with expectations that there will not be any change in rates until October. The Bank’s next opportunity for a change is September 6th but the general view is there will not be any action until the October 25th setting. The Bank’s Monetary Policy Report will also be published on that date.
No one from the Bank has a public address scheduled until after the September setting. Deputy Governor Tim Lane will talk on September 18th and Governor Stephen Poloz has a speech and news conference on the 27th.
Governor Poloz has said the Bank is basing its rate decisions on “the data” and he would prefer to have markets pay attention to that, rather than “hanging on the Bank’s every word.” The markets have responded by saying they need to hear the Bank’s interpretation of the data, so you can count on everyone listening quite intently to Poloz next month, on the 27th.
Market watchers are looking at a 70% chance of a rate increase in October, which will likely be the last move for 2017.