TD Securities strategists note the Bank of Canada’s (BoC) June Summary of Deliberations maintained its recent balancing act between higher Oil price spillover risks and domestic softness. Policymakers downplayed the Q1 Gross Domestic Product (GDP) upside surprise, stressed the economy is not in recession, and highlighted stronger per-capita consumption while treating inflation risk discussions as somewhat dated after Oil’s latest moves.

BoC downplays GDP surprise and oil slide

"The Bank of Canada's Summary of Deliberations from June stuck to the recent script as the Bank continued to balance the risk of spillovers from higher oil prices against ongoing trade uncertainty and domestic weakness."

"The Bank did downplay the Q1 GDP surprise as members noted that government spending can be choppy and agreed the economy was not in recession."

"The Minutes also cited stronger per-capita consumption, while the discussion around inflation risks came off as more stale given the recent move in oil prices."

"The Bank had a relatively conservative assumption for crude oil in its April MPR, which should give it a little more cover to downplay the recent decline."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)