22 August 2014

“It supports the central bank’s opinion that inflation rate may go down a bit, so it’s kind of temporary,” – noted David Tulk, TD Securities. “As a result, the Bank of Canada has more time to keep rates unchanged.”

As you know, last month the Bank’s Governor Stephen Poloz said the downside risks to inflation, caused by weak results at the beginning of the year, had decreased. He noted that the BoC keeps its neutral position, which means the next rate change can be either a cut or an increase.

The next central bank’s rate meeting is on September 3.

In Tulk’s opinion, we may see a rate increase in the third quarter of 2015.