Don’t miss this month’s edition of the George Davis Report, where George discusses the mixed messages that the economy is giving the BoC ahead of their October interest rate decision.
What you need to know:
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The BoC will be pleased to see that Q3 GDP growth is off to a slow start after a surprise contraction in Q2 – suggesting that the demand side of the economy is responding to rate hikes.
The inflation side is still a concern though, as an uptick in August headline and core CPI stalled a declining trend at rates that are above the BoC’s 2% target.
The labour market adds to the mixed signals from the economy, as wage growth remains high despite an increase in the unemployment rate and a decline in the vacancy rate.
As such, the BoC will have to decide whether to put more weight on limited progress on the inflation front and raise rates again or defer to the lagged effects of rate hikes on inflation and the labour market and keep rates on hold.
For the trading range:
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