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Deal Addict
Feb 9, 2009
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Jungle wrote:
Dec 5th, 2017 2:44 pm
BIG jump in Oct exports, particularly energy sector to support rate hike in Jan as things seem to be coming along better than expected:

"Especially strong was the rise in energy exports, primarily to the U.S. Exports of gasoline blending stock were up 44.5 per cent and diesel and fuel oils exports rose 18.4 per cent after a recent drawdown in U.S. inventories of refined petroleum products.

Higher exports of canola seed and canola oil helped boost exports of farm, fishing and intermediate food products by 7.7 per cent to $2.8 billion."

TD economist Dina Ignjatovic said the Bank of Canada is likely to look on the growth of exports as a positive sign for Canada's fourth quarter growth.

A healthy U.S. economy and a Canadian dollar hovering around the 80 US cent mark are helping the export sector, she said in a note to clients.


http://www.cbc.ca/news/business/canada- ... -1.4433460
Wa-Wa-Wa-Wa WELCOME TO THE JUNGLEEEEEEEEE WE GOT FUN AND GAMESSSSS

Dude relax with your rate hikes.. if they happen they happen, you dont need to show us every damn article about some potential rate hike... go have a pina colada and chill.
Deal Addict
May 31, 2007
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asa1973 wrote:
Dec 5th, 2017 4:30 pm
Rising export do not lead to rising consumption inside the country and do not push inflation to the desired 2% target. Moreover, the last thing BoC wants if want to keep export in good shape - have loonie jumped to the USD (which would happened in case of rate hike).

Thus it's not so straightforward as someone wants to paint, and Poloz do not want to "hard" commit neither to hike nor to staying put, likely he will go with same smooth rhetoric as last few month looking on data, US , USD/CAD.

I'd rather expect that rite hike will happen next year, but in same way as last one happened - without any indication in advance.
Futures are just what market believe to happen, they already been wrong this fall (regarding Nov-Dec hike, which at some point was almost "guaranteed" with 90%, afair) do not be surprised if (rather when) they will miss it again.
Exports are about 25% of GDP and have a BIG impact on BOC decisions and growth. Also BOC has addressed recently that inflation target does NOT have be met, in order to hike rates. It is just a target, not the traffic light which determines when to "go."

Export supply and demand can determine the price of goods and push inflation. Are you saying exports sold can't affect the market price of goods back here domestically when measured in CPI?

POLOZ acts like a dove on purpose, to tame the loonie. (and boost exports). Then he shocks the market with no warning, like those last two rate hikes. This is no more than currency manipulation strategy used in his favour.
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May 31, 2007
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Sanyo wrote:
Dec 5th, 2017 7:39 pm
Wa-Wa-Wa-Wa WELCOME TO THE JUNGLEEEEEEEEE WE GOT FUN AND GAMESSSSS

Dude relax with your rate hikes.. if they happen they happen, you dont need to show us every damn article about some potential rate hike... go have a pina colada and chill.
I Love Guns and Roses BTW>. Long live GNR
Deal Addict
Feb 9, 2009
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Jungle wrote:
Dec 5th, 2017 8:08 pm
I Love Guns and Roses BTW>. Long live GNR
I assuming your name was influenced by the song!?
Deal Addict
May 31, 2007
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Sanyo wrote:
Dec 5th, 2017 8:12 pm
I assuming your name was influenced by the song!?
Music yes, but GnR no.

Anyway we are off topic. :)

No rate hike predicted tomorrow BTW
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Apr 21, 2004
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Interest rate unchanged.

The Bank of Canada today maintained its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The global economy is evolving largely as expected in the Bank’s October Monetary Policy Report (MPR). In the United States, growth in the third quarter was stronger than forecast but is still expected to moderate in the months ahead. Growth has firmed in other advanced economies. Meanwhile, oil prices have moved higher and financial conditions have eased. The global outlook remains subject to considerable uncertainty, notably about geopolitical developments and trade policies.

Recent Canadian data are in line with October’s outlook, which was for growth to moderate while remaining above potential in the second half of 2017. Employment growth has been very strong and wages have shown some improvement, supporting robust consumer spending in the third quarter. Business investment continued to contribute to growth after a strong first half, and public infrastructure spending is becoming more evident in the data. Following exceptionally strong growth earlier in 2017, exports declined by more than was expected in the third quarter. However, the latest trade data support the MPR projection that export growth will resume as foreign demand strengthens. Housing has continued to moderate, as expected.

Inflation has been slightly higher than anticipated and will continue to be boosted in the short term by temporary factors, particularly gasoline prices. Measures of core inflation have edged up in recent months, reflecting the continued absorption of economic slack. Revisions to past quarterly national accounts have resulted in a higher level of GDP. However, this is unlikely to have significant implications for the output gap because the revisions also imply a higher level of potential output. Meanwhile, despite rising employment and participation rates, other indicators point to ongoing­ – albeit diminishing – slack in the labour market.

Based on the outlook for inflation and the evolution of the risks and uncertainties identified in October’s MPR, Governing Council judges that the current stance of monetary policy remains appropriate. While higher interest rates will likely be required over time, Governing Council will continue to be cautious, guided by incoming data in assessing the economy’s sensitivity to interest rates, the evolution of economic capacity, and the dynamics of both wage growth and inflation.
Last edited by alanbrenton on Dec 6th, 2017 10:01 am, edited 1 time in total.
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May 9, 2017
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craftsman wrote:
Dec 2nd, 2017 5:19 pm
If Canada was on it's own island without any external trading partners or interactions, then you're right. But unfortunately, Canada isn't an island and external forces have a lot more control over the situation than you might think. The BOC can only buffer situations with interest rates and monetary policy, they can't control them as they don't have enough financial force behind them. If central banks can control inflation as you maintain, then we would not have had the run away inflation as we had late in the last century or how other countries with central banks have run away inflation today.
Most central banks of developed countries have done a pretty good job with inflation targets. New Zealand was the first country in 1990 to target inflation followed by Canada in 1991.

Central banks used to think that high inflation was associated with low unemployment. Countries were not targeting inflation when the US (and other countries) had high inflation in the 70's.
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Jan 27, 2006
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NotRobot wrote:
Dec 6th, 2017 10:08 am
Most central banks of developed countries have done a pretty good job with inflation targets. New Zealand was the first country in 1990 to target inflation followed by Canada in 1991.

Central banks used to think that high inflation was associated with low unemployment. Countries were not targeting inflation when the US (and other countries) had high inflation in the 70's.
They, for the most part, have been lucky in their approach and how things lined up for them (ie conditions were right so that interest rates can be used to influence inflation). Unfortunately, that's not always the case especially if there are other external factors in play. A good example would be oil prices which affects all aspects of the economy (from transport of goods and people to items made out of plastics like consumer goods and clothing). If oil were to spike upwards, all aspects of inflation would be touched. Interest rates would have little control over it.

Also, inflation is a post event indicator (only tracks events that have passed) while interest rates are a future event influencer (only can influence events in a future time - typically six months - and no firm standard of how much influence and on what) so there's an inherent guessing game that happens when applied.
Example -
Let's say last month's inflation exceeded the target range by 0.1%. It's possible this one month excess was really only for one month due to an unforeseen event and an increase in rates was not needed. On the flip side, this 'excess' might be the first of a series of inflation increases and this is just a thin end of the wedge. If the rates were increased this month, the effects of the increases won't be seen for another 6 months and how much of an effect isn't really a known quantity (ie. you can't say that a 1/4 increase in interest rates equals a 0.1% drop in inflation... it might more or less). If you are lucky and guess correctly, then the amount of the increase is correct. However, if the guess was wrong, and maybe an external factor comes into the play, then inflation may move much faster than the planned set of rate increases.
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Jul 14, 2002
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craftsman wrote:
Dec 6th, 2017 2:15 pm
They, for the most part, have been lucky in their approach and how things lined up for them (ie conditions were right so that interest rates can be used to influence inflation). Unfortunately, that's not always the case especially if there are other external factors in play. A good example would be oil prices which affects all aspects of the economy (from transport of goods and people to items made out of plastics like consumer goods and clothing). If oil were to spike upwards, all aspects of inflation would be touched. Interest rates would have little control over it.

Also, inflation is a post event indicator (only tracks events that have passed) while interest rates are a future event influencer (only can influence events in a future time - typically six months - and no firm standard of how much influence and on what) so there's an inherent guessing game that happens when applied.
Example -
Let's say last month's inflation exceeded the target range by 0.1%. It's possible this one month excess was really only for one month due to an unforeseen event and an increase in rates was not needed. On the flip side, this 'excess' might be the first of a series of inflation increases and this is just a thin end of the wedge. If the rates were increased this month, the effects of the increases won't be seen for another 6 months and how much of an effect isn't really a known quantity (ie. you can't say that a 1/4 increase in interest rates equals a 0.1% drop in inflation... it might more or less). If you are lucky and guess correctly, then the amount of the increase is correct. However, if the guess was wrong, and maybe an external factor comes into the play, then inflation may move much faster than the planned set of rate increases.
The BOC reacting to latest inflation data is now driving while looking in the rear-view mirror.
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Jul 8, 2010
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Sanyo wrote:
Dec 5th, 2017 7:39 pm
Dude relax with your rate hikes.. if they happen they happen, you dont need to show us every damn article about some potential rate hike... go have a pina colada and chill.
And then you realize, this comment comes from someone that told everybody here there is 100% certainty there will be no rate increase in all 2017....
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Isostar wrote:
Dec 6th, 2017 7:17 pm
And then you realize, this comment comes from someone that told everybody here there is 100% certainty there will be no rate increase in all 2017....
And? Your point? We had two fluke months of hot gdp growth that made poloz pull the trigger to bring rates back to 2015... I’m ok with it if b of c ever needs to decrease again they got more room to do it.
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Dec 13, 2016
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So, another major fail by doomers predicting a rate increase.

It's always the same. These bold predictions and nothing ever comes to fruition.

"Interest rate increase likely on the way". Yea... right.... over and over again.
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May 31, 2007
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Does anyone know how much the 3 months treasury will go up when The Fed hikes rates next week?
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Apr 21, 2004
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Media / analysts predict three rate hikes in 2018. I predict two. :)

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