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Previewing this week’s Bank of Canada meeting, ING analysts argue that the bank is likely to stick to its dovish message and keep its policy rate unchanged at 1.75%.

Key quotes

“As both domestic and global risks continue to linger, the Bank of Canada looks set to retain its dovish bias at its April meeting. We think a rate hike this year looks increasingly unlikely.”

“The BoC’s latest business survey conveyed a sense of reduced business optimism compared to the winter survey, although investment intentions remained relatively healthy for the year ahead. However, this didn’t include firms that are directly (or indirectly) affected by the production constraints attached to Western Canadian crude oil.”

“While there is still some room for green shoots later in the year if these risks begin to fade, it will take time for positive sentiment to feed through into better economic activity. We therefore wouldn’t be surprised to see the BoC follow the Fed’s lead and signal that rates will be kept on hold for the rest of the year.”