Expansionary monetary policy in China
Comments by Bank of Canada Governor Stephen Poloz last week combined with Friday’s inflation data helped the loonie end the week up close to 250 bps against the USD. The CAD was driven upward by March’s positive CPI reading, which showed that year-over-year core inflation is sitting around 2.4%, above pundits’ consensus of 2.1%. Low crude oil costs were not enough to offset rising food prices. Although we can’t talk about a change in Canadian monetary policy for the moment, Canadian fixed rates appear to have adjusted accordingly, as we’ve seen a rise of close to 0.10% on most maturities.
Looking abroad, the People’s Bank of China announced yesterday that it was cutting its reserverequirement ratio for banks by 1% to 18.5% in an effort to stimulate growth in the country. Later today, BoC Governor Stephen Poloz will give a speech to the financial community in New York.
