LOGIN JOIN SHARECAFE SIGN UP FOR OUR NEWSLETTER ADVERTISE
share cafe logo  
 
SHARECAFE COMMENTARY

The Week That Was
BY STEPHEN KOUKOULAS - 14/07/2017 | VIEW MORE ARTICLES BY ALAN KOHLER

The Bank of Canada (akin to our Reserve Bank of Australia) shocked just about everyone with a decision to hike official interest rates for the first time in 7 years. The 25 basis point rate hike took the rate to 0.75 per cent, with the market consensus suggesting the move was based on a more upbeat pace of economic expansion rather than inflation, which continues to track below the BoC target.

The BoC noted “Canada’s economy has been robust, fuelled by household spending… Household spending will likely remain solid in the months ahead, supported by rising employment and wages.”

These fundamentals are quite different to those prevailing in Australia and as such, there appear to be few lessons for the RBA from the BoC move. The Australian economy has been anything but robust with GDP skating near 20 year lows and household spending is soft. And while employment in Australia has been quite strong, wages growth remains at record lows.

As the chart shows, the BoC move put a rocket under the Canadian dollar which hit a 14 month high against the US dollar.

 



View More Articles By Alan Kolher

The Constant Investor is the new home of Alan Kohler, founder of Eureka Report and the ABC's finance presenter. Join to receive - Kohler's Weekly Overview, exclusive stock tips, investment ideas, podcasts and much more. Click here to learn more.



 

RECENTLY ADDED TO SHARECAFE


 › Friday At The Close
 › Neutral Madness
 › The Competitive Advantage Of A 'Customer Moat'
 › Defend Your Portfolio With These Small Caps
 › Market At Midday On Friday
 › Labour Market Begins To Boom
 › Re-Charged Jervois Starts Its Engine With One Eye On The Battery Space
 › Downer 'Greenmails' Spotless Shareholders
 › Old Problems For New Age Netflix?
 › Next Week At A Glance
 › FBU - Credit Suisse rates the stock as Outperform
 › S32 - Citi rates the stock as Neutral
 › JHX - Deutsche Bank rates the stock as Buy
 › The Overnight Report: Time Out
More ShareCafe   

GET THE SHARECAFE BREAKFAST BRIEFING


Delivered free to your inbox before the market opens each trading day. Sign up below +

SHARECAFE VIDEO


View More Videos