Chilly..........2 points re CAD CPI and interest rates.......
i think Carney(BOC) is pretty slippery and really not in a position to buck the trend. only a few days ago he was complaining about the strong CAD being a hinsderance to the CAD ec and exports to the US. then he also made the claim that canadians are over leveraged with personal and real estate debt
doesn't add up right......i think it will be tough for the CAD to break the range low of 0.9850 for 2 reasons, one being if the US ec improves then less justification for more QE. if the US ec weakens it hurts the CAD ec
i think Carney is blowing smoke and it isn't the first time. he spent 8 yrs with GS
CPI....
CPI in March in the euro zone rose 2.7% y/o/y, upwardly revised from the initial reading of 2.6%. It’s the 16th month in a row above the ECB target rate of 2.0%. CPI in the UK rose 3.5% y/o/y, the 27th month in a row above 3.0%. Out last week, the 2.7% US CPI y/o/y gain was the 14th month in a row above the new 2.0% Fed target rate. Price stability this is not. - Barry Ritholz
Canadian Dollar;
In a rare central bank acknowledgment of the stickiness of inflation, the Bank of Canada, while keeping their benchmark rate at 1.0% as expected, hinted at a rate hike soon. With y/o/y CPI at 2.0%+ for 17 straight months, the BoC today said “In light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2% inflation target over the medium term.” Of course with a healthy economy, the BoC has more room to focus on inflation instead of growth but strictly from an inflation standpoint, inflation readings in the US, UK and Euro zone are similar to those of Canada. The lack of needed deleveraging we know is what will have the Fed’s benchmark rate at zero, the UK at .50% and the Euro zone at 1.0% for a while on top of massive balance sheets.
i think Carney(BOC) is pretty slippery and really not in a position to buck the trend. only a few days ago he was complaining about the strong CAD being a hinsderance to the CAD ec and exports to the US. then he also made the claim that canadians are over leveraged with personal and real estate debt
doesn't add up right......i think it will be tough for the CAD to break the range low of 0.9850 for 2 reasons, one being if the US ec improves then less justification for more QE. if the US ec weakens it hurts the CAD ec
i think Carney is blowing smoke and it isn't the first time. he spent 8 yrs with GS
CPI....
CPI in March in the euro zone rose 2.7% y/o/y, upwardly revised from the initial reading of 2.6%. It’s the 16th month in a row above the ECB target rate of 2.0%. CPI in the UK rose 3.5% y/o/y, the 27th month in a row above 3.0%. Out last week, the 2.7% US CPI y/o/y gain was the 14th month in a row above the new 2.0% Fed target rate. Price stability this is not. - Barry Ritholz
Canadian Dollar;
In a rare central bank acknowledgment of the stickiness of inflation, the Bank of Canada, while keeping their benchmark rate at 1.0% as expected, hinted at a rate hike soon. With y/o/y CPI at 2.0%+ for 17 straight months, the BoC today said “In light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2% inflation target over the medium term.” Of course with a healthy economy, the BoC has more room to focus on inflation instead of growth but strictly from an inflation standpoint, inflation readings in the US, UK and Euro zone are similar to those of Canada. The lack of needed deleveraging we know is what will have the Fed’s benchmark rate at zero, the UK at .50% and the Euro zone at 1.0% for a while on top of massive balance sheets.
