Christian Lawrence, senior market strategist at Rabobank, expects the BoC to leave the policy rate unchanged at 1.75% today and points out that the CAD OIS implies almost no chance of either a hike or a cut.
Key Quotes
“If the Fed moves in March (as is our base case) then there is still a chance we see one final 25bp hike from the Bank of Canada.”
“We remain particularly concerned about the outlook for household consumption but we also expect business investment and trade to remain lacklustre.”
“We would prefer being short USD/CAD and long short dated OIS heading into this meeting as we still expect the BoC to be more hawkish than the market is currently positioned for despite our change in view.”
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