BoC: Business sentiment in Q1 softened even before concerns around COVID-19 intensified

The business sentiment in Canada in the first quarter of the year softened in most regions even before concerns over the COVID-19 intensified, the Bank of Canada's (BoC) latest Business Outlook Survey (BoS) showed on Monday. The BoC further noted that the confidence deteriorated most in energy-producing regions.

Key takeaways

"BoC BoS survey interviews were conducted before concerns around COVID-19 intensified; two smaller phone surveys were completed more recently to provide a picture of the impact of the COVID-19 shock and low oil prices on firms."

"BoC survey on COVID-19 shock reports a collapse in sales in accommodation, food services and recreation industries; non-food retailers reported a dramatic drop in foot traffic, scaling down operations, but some pivoting to less-developed lines."

"Separate BoC survey on COVID-19 shock shows grocery retailers and related transportation services note sales had reached unprecedented levels."

"Separate BoC survey on COVID-19 shock shows firms taking a wait-and-see approach on capital expenditures; almost all firms in tourism and food-service cutting back on renovations and purchases of machinery and equipment etc. To preserve cash."

Market reaction

The USD/CAD largely ignored these comments and was last seen trading at 1.4128, erasing 0.52% on a daily basis.