Chances of Bank of Canada rate cut in March rising as outlook for economy gets worse
Financial Post - Jan 29, 2015
A patchy job market and reluctance among lenders to reduce prime rates are adding to forecasts for continued low oil prices to spur bets the Bank of Canada will cut borrowing costs again in March.
Derivatives trading indicates a better than 50-50 chance the central bank will lower its benchmark interest rate to 0.5% at the March 4 meeting, after surprising markets with a quarter-percentage point reduction last week. Governor Stephen Poloz cited the negative effect of plunging oil prices as the main reason for the Jan. 21 move.
Statistics Canada released labor-market revisions today that slashed 2014 job gains by more than a third, evidence of the employment weakness that policy makers including Poloz have said indicate “material slack†in the economy.
