How do you like your eggs?
[Yes, this is going somewhere :-) ]
I’ve been going through various cycles of how I like to cook my eggs in the morning. Anytime really.
The past 12 months I have been making my eggs sunny side up. Previously anything but a scrambled egg was a mind-blowing event.
I’m thinking of cooking eggs in terms of hard vs soft. Here’s why …
The Bank of Canada is making an interest rate announcement tomorrow.
Our Central Bankers look at hard data to guide their interest rate movement decision making (hard data like inflation, price of oil, GDP, wage growth, unemployment etc).
In Mortgage land, any change to the Bank of Canada interest rate trickles into the retail Banking level and changes the Prime lending rate. Variable Mortgages and Home Equity Lines of Credit are attached to the Prime lending rate.
Yesterday, the Bank of Canada released soft data that is a factor in anticipating changes to Canada’s central interest rate. It’s called the Business Outlook Survey (BOS).
[See what I’m doing here? Hard and soft data …you get it :-) ]
Our policy makers ask questions and collect data from Canadian firms to get a sense of what people in the economy think/feel is coming next.
I think it’s good to have a finger on the pulse of the economy, but I also think this is a bit of a soft data point (not to diminish its value, but to make the distinction with other data points like the consumer price index).
Some of the Business Outlook Survey responses are pointing to slower sales, less demand for product and anticipate flat pricing. See these charts:
Business firms thoughts on anticipating demand:
Capital expenditure sentiment is relativley positive!
Indicators or labour shortages have come off peaks. Will this ease pressure on wage growth?
Flat projection of cost/growth outlook.
Business Outlook softening.
With this Business Outlook Survey, and inflation that is within the Bank of Canada’s target zone, it is widely thought there will be no change to the Key Overnight Lending Rate tomorrow.
I anticipate our Central bank rate will be flat for the next several months.
Do you know anyone buying or selling a home right now that you think would benefit speaking with me?
Thanks for thinking!
Talk soon,
Chad “how do you like your eggs” Moore
