BoC remains wary, as data improve – RBC CM

Analysts at RBC Capital Markets explain that the Bank of Canada retained the same cautious tone in its statement-only meeting this week as on display at the January MPR. 

Key Quotes

“In both cases, the Bank highlighted Canada’s “persistent slack” relative to the U.S. and “the impact of significant uncertainties weighing on the outlook”.  Increasingly, the cautious tone is contrasting with more positive nearerterm developments, reflected this week with the release of the Q4 national accounts data.  The report showed headline GDP growth of 2.6% versus consensus expectations for 2.0% growth, with the gains coming primarily from a sharp improvement in net exports (contributing some 5.2pp to growth), with solid gains also seen in personal consumption (2.6% growth, adding some 1.5pp to headline growth) and residential construction (+4.8% and 0.4pp, respectively).”