Chances of September BoC rate cut rise after economy weakens in Q2
The national economy regressed in the second quarter as trade tensions with the US continued to pummel the growth outlook, leading markets to increase their expectations of a September interest rate cut by the Bank of Canada.
Statistics Canada said on Friday morning that gross domestic product (GDP) slowed by 1.6% year over year in the second quarter, slightly more than the central bank had expected, as exports fell amid the ongoing trade war.
Markets priced in a 55% chance that the central bank would cut rates in its next decision, up from around 40% before the announcement, signalling that traders view a reduction as more likely – but still not a cert.
