Bank of Canada Q3 Surveys Show Modest Sentiment Gains Alongside Rising Inflation Expectations

Bank of Canada third-quarter surveys showed modest sentiment gains despite subdued confidence. The Business Outlook Survey indicator ticked up to -0.33 from a prior -0.38 to -0.39, driven by stronger future sales and a drop in firms expecting a recession to 6% from 17%. The Canadian Survey of Consumer Expectations reflected a 17-point gain in perceived financial health, offset by a 13-point drop in spending intentions. However, consumer five-year inflation expectations surged to roughly 3.9% from 3.4%, influenced by trade uncertainties that may constrain aggressive monetary policy easing.