BoC's Poloz: Recent developments in markets are symptoms of normalization

Here are some of the key highlights from the BoC Governor Stephen Poloz's prepared speech about the financial markets and implications for monetary policy at the Canada-UK Chamber of Commerce, in London.

   •  Higher long-term bond yields, rising USD and recalibration in equity markets are symptoms of normalization.
   •  Investors can no longer expect long-term yields to be suppressed by extraordinary monetary policies.
   •  A decade of monetary policy action is finally taking deflation risk off the table.
   •  It is only natural to expect more volatility in stock prices as support is removed.
   •  If investors now think expected earnings need to be discounted by higher rates, it lowers the price they are prepared to pay.
   •  A key implication of divergence of growth between the US economy and the rest of the world is stronger USD. 
   •  This has caused strains for some emerging economies, which will continue.
   •  Repeats that trade risks are two-sided; current disputes could be resolved, providing a new source of lift for the global economy.
   •  Repeats interest rates will need to rise to meeting inflation target; says the bank will pay close attention to international trade developments.