In a widely expected move, the Bank of Canada’s rate-setting committee kept monetary policy steady and continued its quantitative tightening programme.
The lender’s governing council said held its target for the overnight rate at 4.5%, with the Bank Rate at 4.75% and the deposit rate at 4.5%.
In its accompanying statement, the bank noted that global economic developments had evolved in line with January’s Monetary Policy Report (MPR), but officials observed that the Canadian economy had fallen below in-house projections for Q4.
The lender acknowledged that past rate increases were already having the desired effect of slowing activity, noting that restrictive monetary policy continued to weigh on household spending.
“Business investment has weakened alongside slowing domestic and foreign demand,” the bank said. "Overall, the latest data remains in line with the bank’s expectation that CPI inflation will come down to around 3% in the middle of this year."
Douglas Porter, BMO Capital Markets’ chief economist, wrote that the bank statement “was mostly factual, highlighting the Q4 GDP downside miss, but noting that the softness was largely due to inventories.”
Loonie sinks
Investors added to Canadian dollar shorts following the release. Traders noted that the Loonie fell to four-month lows in the immediate aftermath. The selloff was put down to the omission from the statement of the sentence: “In Canada, recent economic growth has been stronger than expected and the economy remains in excess demand.”
Yet analysts posited that rate-setters remain wary of upside risks. The penultimate comment in the statement said the “governing council will continue to assess economic developments and the impact of past interest rate increases and is prepared to increase the policy rate further if needed to return inflation to the 2% target.”
However, James Knightley, chief international economist at ING, sounded sanguine about the possibility of further hikes. “We don’t think the central bank will need to. Canada’s high household debt levels and greater exposure to interest rates rate hikes via a higher prevalence of variable rate borrowing make the economy more at risk of a deeper downturn than the US […] As such, the next move is more likely to be an interest cut.”
/*jshint esversion: 6 */
var socket;
var assigned_server = 3001;
var distributor_server = 3010;
var publisher_channel = '';
var broadcaster_channel = '';
var remote_ip = '';
var session_info = {};
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case 'PauseLogging': clearTimeout(logging_interval); break;
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case 'PlayerLogResponse': player_log_response(msg.data); break;
case 'CloseSocket': close_socket(); break;
case 'RequestMessageSearch': request_message_search(msg.data); break;
case 'RequestMoreMessages': request_more_messages(msg.data); break;
case 'PlayerDisconnectedAnnoucementTimeoutStart': player_disconnected_annoucement_timeout_start(); break;
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function player_log_response(data) {
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data_array.respond_to_socket = data.respond_to_socket;
data_array.player_socket_id = data.player_socket_id;
data_array.logs = data.logs;
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data_array.search_term = data.search_term;
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function request_more_messages(data) {
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data_array.last_record_id = data.last_record_id;
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function check_channel_status(data) {
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}
function check_channel_status_response(data) {
postMessage({ action: 'CheckChannelStatusReponse', stream_status: data.stream_status.status, onair: data.stream_status.onair, connected: data.stream_status.connected });
}
function join_publisher_channel(data) {
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data_array.single_sign_on = data.single_sign_on;
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data_array.http_referrer = data.http_referrer;
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data_array.php_session_id = data.php_session_id;
data_array.from_react = data.from_react;
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socket.send(msg_string); }
postMessage({action: 'PublisherChannelJoined' });
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function session_static_info(msg) {
set_static_session_info(msg.data);
start_log();
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function connect_to_distributor(msg) {
publisher_channel = msg.data.publisher_channel;
remote_ip = msg.data.remote_ip;
socket = new WebSocket("wss://ws.livesquawk.com/ws"+distributor_server);
socket.onopen = function(event) { request_server_assignment(); };
socket.onmessage = function(event) {
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case 'server_assignment_response': server_assignment_response(data); break;
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function session_info_interval() {
postMessage({action: 'RequestSessionInfo' });
logging_interval = setTimeout(session_info_interval,logging_interval_time);
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function server_assignment_response(data) {
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socket.close();
connect_to_assigned_server();
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console.log("Connected to server "+assigned_server);
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case 'reconnect': postMessage({ action: 'VisibleConsole',console_string: "Reconnected" }); break;
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case 'new_latest_news':
case 'delete_report':
case 'add_report':
case 'add_ref_doc':
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case 'calendar_insert':
case 'calendar_delete':
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case 'AppStart':
case 'AppStop':
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case 'BroadcasterStopped':
case 'added_cme_report':
case 'updated_cme_report':
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socket.onerror = function(event) {};
socket.close(1000);
console.log('Socket Closed');
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data.action = data.type;
postMessage(data);
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data_array.remote_ip = data.remote_ip;
data_array.username = data.username;
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playing = true;
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session_info.user_agent = data.user_agent;
session_info.browser_version = data.browser_version;
session_info.cookies_enabled = data.cookies_enabled;
session_info.platform = data.platform;
session_info.player_version = data.player_version;
session_info.stream = data.stream;
session_info.connection_protocol = data.protocol;
session_info.delay_target = data.delay_target;
session_info.session_email = data.session_email;
session_info.remote_ip = data.remote_ip;
session_info.php_session_id = data.php_session_id;
session_info.application_name = data.application_name;
session_info.http_referrer = data.http_referrer;
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function start_log() {
var session_start_date = new Date();
session_start_time = session_start_date.getTime();
var months = ['Jan','Feb','Mar','Apr','May','Jun','Jul','Aug','Sep','Oct','Nov','Dec'];
var session_start_date_string = session_start_date.getDate() + " " + months[session_start_date.getMonth()] + " " + session_start_date.getFullYear();
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data_array.username = session_info.session_email;
data_array.php_session_id = session_info.php_session_id;
data_array.webrtc_protocol = '';
data_array.session_start_time = (session_start_time/1000).toFixed(0);
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var data_array = {};
var msg_string = '';
var current_date = new Date();
var current_time = current_date.getTime();
session_info.protocol = data.protocol;
session_info.curr_delay = (data.effective_latency / 1000).toFixed(2);
session_info.session_length = current_time - session_start_time;
session_info.ping_time = data.ping_time;
session_info.jitter = data.jitter;
session_info.packet_loss = data.packet_loss;
session_info.effective_latency = data.effective_latency;
session_info.mean_opinion_score = data.mean_opinion_score;
session_info.restarts = data.restarts;
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data_array = {};
data_array.type = 'webrtc_log_data_full';
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data_array.threshold = 0;
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data_array.op_sys = '';
data_array.flash_version = '';
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data_array.jitter = session_info.jitter;
data_array.packet_loss = session_info.packet_loss;
data_array.effective_latency = session_info.effective_latency;
data_array.mean_opinion_score = session_info.mean_opinion_score;
data_array.session_id = session_info.session_id;
msg_string = JSON.stringify(data_array);
if (socket.readyState == 1) { socket.send(msg_string); }
}
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data_array = {};
data_array.type = 'webrtc_log_data';
data_array.session_id = session_info.session_id;
data_array.php_session_id = session_info.php_session_id;
data_array.connection_protocol = session_info.protocol;
data_array.restarts = session_info.restarts;
data_array.threshold = 0;
data_array.curr_delay = session_info.curr_delay;
data_array.session_length = session_info.session_length;
data_array.date = current_time;
data_array.webrtc_protocol = session_info.protocol;
data_array.ping_time = session_info.ping_time;
data_array.jitter = session_info.jitter;
data_array.packet_loss = session_info.packet_loss;
data_array.effective_latency = session_info.effective_latency;
data_array.mean_opinion_score = session_info.mean_opinion_score;
data_array.stream = session_info.stream;
msg_string = JSON.stringify(data_array);
if (socket.readyState == 1) { socket.send(msg_string); }
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socket_emits++;
if (socket_emits == 100) { socket_emits = 0; }
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Key lending rates unchanged
Policymakers drop hawkish language
Previous policy action already dampening demand
Loonie hits four-month low following decision
By Harry Daniels
LiveSquawk News
@HarryDaniels71
8 March 2023 | 16:30 GMT
In a widely expected move, the Bank of Canada’s rate-setting committee kept monetary policy steady and continued its quantitative tightening programme.
The lender’s governing council said held its target for the overnight rate at 4.5%, with the Bank Rate at 4.75% and the deposit rate at 4.5%.
In its accompanying statement, the bank noted that global economic developments had evolved in line with January’s Monetary Policy Report (MPR), but officials observed that the Canadian economy had fallen below in-house projections for Q4.
The lender acknowledged that past rate increases were already having the desired effect of slowing activity, noting that restrictive monetary policy continued to weigh on household spending.
“Business investment has weakened alongside slowing domestic and foreign demand,” the bank said. "Overall, the latest data remains in line with the bank’s expectation that CPI inflation will come down to around 3% in the middle of this year."
Douglas Porter, BMO Capital Markets’ chief economist, wrote that the bank statement “was mostly factual, highlighting the Q4 GDP downside miss, but noting that the softness was largely due to inventories.”
Investors added to Canadian dollar shorts following the release. Traders noted that the Loonie fell to four-month lows in the immediate aftermath. The selloff was put down to the omission from the statement of the sentence: “In Canada, recent economic growth has been stronger than expected and the economy remains in excess demand.”
Yet analysts posited that rate-setters remain wary of upside risks. The penultimate comment in the statement said the “governing council will continue to assess economic developments and the impact of past interest rate increases and is prepared to increase the policy rate further if needed to return inflation to the 2% target.”
However, James Knightley, chief international economist at ING, sounded sanguine about the possibility of further hikes. “We don’t think the central bank will need to. Canada’s high household debt levels and greater exposure to interest rates rate hikes via a higher prevalence of variable rate borrowing make the economy more at risk of a deeper downturn than the US […] As such, the next move is more likely to be an interest cut.”