When the Governor for the Bank of Canada makes a speech on the economy and the views of the central bank, market participants pay attention to a number of areas.

The market will generally focus on points that could suggest future interest rate changes. For example, if the speech states that high housing prices are fueling inflation, then the financial markets will expect an interest rate increase in order to suppress inflation. Markets will also monitor the highlighted sectors in the upcoming period in order to gauge the likelihood of rate increases to come.

Participants will focus heavily on the language used in the Governor's speech. If the Governor is pessimistic ("Hawkish") about the inflationary outlook for the economy, then the market assumes a higher likelihood of future rate increases. Optimism in the Governor's outlook ("Dovish") would suggest to markets that inflation is in check and that future rate increases are unlikely.

The Governor's speech is an opportunity to better understand what the goals are in managing the Bank of Canada, and what stance is to be taken on controversial economic issues. For example, the Bank of Canada may state they favor a weaker currency in order to promote activity in the export sector. In this example markets would then expect the Governor to keep interest rates low ensuring a weaker currency that would make Canadian exports less expensive and more competitive. The Bank of Canada often gives this kind of insight is during these scheduled speeches.

Relevance : Tends to move markets on release
Release Schedule : During the eight times the Bank of Canada changes key interest rates and any other time the Bank of Canada, the Canadian Government, or the Governor deems fit
Source of Report : Bank of Canada
Web Address : http://www.bankofcanada.ca/en/index.html
Address of Release : http://www.bankofcanada.ca/en/speeches/index.html