BoC Business Outlook Survey shows comfort with the status quo - TD Securities

Assessing the Bank of Canada's Business Outlook Survey (BOS) for the second quarter, TD Securities macro strategist Robert Both said it was surprisingly upbeat and added that it showed a strong increase in future sales expectations despite an increasingly murky global backdrop. 

"The balance of opinion around business investment was unchanged at +20, and firms continue to report broad hiring plans as shown by a slight increase in future employment levels, despite the 127k jobs added since the April BOS. Together, these developments helped drive an improvement in the BOS (PCA) Indicator which firmed to +0.2 from -0.6 in April."

"While trade tensions featured prominently in the previous report, the July BOS partially downplayed the impact of global uncertainty. Foreign demand was seen as a strong factor underpinning future sales growth, even with an increase in the number of firms who expect a negative impact from trade policy."

"Markets should take this report with a grain of salt given the G20 backdrop and potential for a significant shift in global trade tensions over the next 48 hours, but barring a significant deterioration in the US/China relationship the Bank of Canada looks increasingly determined to hold the line."