Bank of Canada keeps key interest rate at 0.5 per cent

The bank didn’t update the monetary policy report on Wednesday but said inflation was “roughly” in line with its expectations, with total inflation below the two per cent target and measures of core inflation around two per cent.

The central bank called an increase in July exports “encouraging”, but said ground lost in earlier months could weigh on overall economic growth.

“Interestingly, despite providing a laundry list of reasons to expect healthy growth in the second half of the year, the discussion of the Canadian growth outlook ended on the somewhat sour note that growth may disappoint their July forecast”, DePratto said.

Royal Bank of Canada makes up approx 0.03% of First Trust Advisors Lp’s portfolio.Zurcher Kantonalbank (zurich Cantonalbank) reduced its stake in RY by selling 43,460 shares or 6.24% in the most recent quarter.

In its September 7 interest rate decision, Canada’s central bank highlighted the Q2 underperformance in exports after factoring in lower USA business investment spending. Independent research bodies have been suggesting that Canada’s economy is slightly contracting, with “Statistics Canada” even reporting that that Canada’s economy had contracted by 1.6% in the second quarter of 2016. Bank of Montreal chief economist Doug Porter said the bank has “zero appetite for rate hikes”.

But the Bank went on to cite risks that the profile for the economy “will be somewhat lower than anticipated in July” due to the weakness we saw in exports since the last forecast.

The economy is expected to rebound in the third quarter as oilsands production resumes and reconstruction work begins in Fort McMurray, Alta., and the surrounding areas damaged by the wildfires.

That was worse than the 1.0 per cent pace that the Bank of Canada had expected when it published its last monetary policy report in July.

“On balance, risks to the profile for inflation have tilted somewhat to the downside since July”.

Still, the bank projected a “substantial rebound” in economic growth in the second half of the year, boosted by the recovery from a major wildfire that hit Alberta in May and federal stimulus spending.

Both global and US economic growth was lower than the bank expected in the second quarter, but the Bank is looking for significant strengthening in the second half of the year. “At the same time, while there are preliminary signs of a possible moderation in the Vancouver housing market, financial vulnerabilities associated with household imbalances remain elevated and continue to rise”, the Bank said.

Bank of Canada Governor Stephen Poloz listens to a question as he holds a new conference at the National Press Theatre in Ottawa on Wednesday, April 13, 2016. The benchmark price for homes in the city continued to climb, the real estate board said.