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Stop the Presses!

Mark Carney announced this morning that the Bank of Canada was keeping interest rates at 1%!  Ok, not really a big surprise since 100% of all economist polled thought that rates were going to stay at 1%, in fact every Canadian thought the rates were going to stay at 1%.

So not really a surprise at all.  Among all the data for the first half (so far 1% Q1 and -02% Q2 GDP growth) has not been spectacular.  That the BoC maintained its 2.9% growth for 2011 is "surprising" for that to occur the second half of 2011 will have to be a "gangbusters" (really simple math -- first half generated about 0.45% of a total of 2.9% -- so we aer looking at 5% growth rate in the second half).

The odds of very strong growth is limited, new mortgage rules make it difficult now for Canadian to withdraw equity from their home for consumption (although Canadian consumption as a percentage of GDP is around 55%, far away from the U.S. 70%), moreover Canadian (probably due to our proximity to the "disaster" that is America) are gloomy which doesn't say anything positive about growth in spending (BTW income is growing but substantially below the rate of inflation).

Ok enough from "Captain Gloomy" there is no other news on the Canadian front.  Oil is playing its usual game ($87/bbl this AM) and the CAD is playing around 1.02/98 seesaw around these levels.  big question is what is the impact of the Swiss National Bank trading band for the Swiss Franc on "safe haven countries" that have decent economic performance, reasonably sound financial system?  I don't know, I really don't


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