Next week, the key event for the loonie (CAD) will be the Bank of Canada meeting on Wednesday. A rate hike is expected according to market consensus but National Bank of Canada’s analysts expect BoC to remain on the sideline.
Key Quotes:
“The highlight of the week will be the central bank’s monetary policy meeting and accompanying MPR. With its three core inflation measures close to two percent, it could be said that the Bank has a green light to proceed with further policy normalization. However, the deterioration of the international trade outlook since the central bank’s last meeting ought to give pause to the BoC.”
“With the U.S. threatening to instigate a trade war with China, and with NAFTA negotiations stalling, we don’t see conditions as supportive of further monetary policy normalization.”
“We expect the central bank to remain on the sideline this week, an opinion that runs counter to the market’s view.”
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