Daily digest market movers: Canadian Dollar stumbles as BoC highlights pessimistic firms
- The BoC’s latest Business Outlook Survey showed many Canadian firms have had weak sales expectations for several quarters, citing still-high equipment costs as a reason to avoid investment spending.
- A notable lack of investment in productivity improvements means Canadian firms are caught in an efficiency trap where firms avoid productivity investment because of a middling economy lacking productivity investment.
- Despite weak demand and ongoing high costs, the proportion of firms expecting a recession in the coming 12 months continues to decline, down from a high of 45% in Q1 2023 to just 20% in Q2 2024.
- US Retail Sales on Tuesday could complicate things as rate-cut-hungry markets hope for a continued decline in US activity indicators.
- BoC’s Business Leaders’ Pulse, percentage of firms reporting positive sentiment minus the percentage reporting negative sentiment:
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