BoC survey: Slight improvement in business sentiment; investment and hiring intentions remain healthy

• Canadian businesses expect inflation to remain below BoC's target.
• Business sentiment improves slightly in the second quarter according to the survey.
• The USD/CAD pair extends daily decline, trades at multi-month lows.

The Bank of Canada's Business Outlook Survey for the second quarter highlighted that there was a slight improvement in the business sentiment and investment and hiring intentions remained healthy. 

The USD/CAD came under a modest bearish pressure amid the upbeat tone in the statement and was last seen losing 0.15% on the day at 1.3075. Below are some key takeaways as reported by Reuters.

"Businesses expect increase in sales growth over next 12 months, backed by healthy domestic and foreign demand and low C$."

"Weakness tied to the Western Canadian oil industry and global trade winds continue to hold back future sales."

"Indicator of capacity pressures recovered somewhat after falling in last survey; reports of labor shortages increased from a low level but are not widespread."

"Input price growth is expected to slow slightly as several firms anticipate pressures from tariffs will fade over next 12 months."

"Output growth seen accelerating modestly as more firms see favorable conditions for passing on various cost increases to customers."

"Intentions to increase employment are positive, still widespread across most regions and sectors."

"Several firms expect various regulations and policies to hold back further sales, with some citing uncertainty over future pipeline capacity and crude production curtailments."

"Inflation expectations are unchanged; majority of firms anticipate inflation will be in lower half of bank's target range."

"Mortgage lending conditions eased in q2 while non-mortgage conditions remained mostly unchanged."