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Christian Lawrence, analyst at Rabobank, expects the BoC policy rate to remain unchanged at 1.75% today, which is also unanimously expected by the 21 analysts surveyed by Bloomberg.

Key Quotes

“CAD OIS implies almost no chance of either a hike or a cut at this meeting and only around a 15% chance of a 25bp hike by the October meeting. Although a more dovish tone than January can be expected, the BoC isn’t likely to discuss easing and the door will be left open for further rate hikes and a move towards ‘neutral’.”

“We do not expect any further rate increases this cycle and expect the BoC to cut rates 25bp in 2020 Q2. This call is partly reliant on Rabo’s forecast for no further Fed hikes this cycle.”

“We remain particularly concerned about the outlook for household consumption but we also expect business investment and trade to remain lacklustre. This week’s decision will not be accompanied by a new Monetary Policy Report (MPR). We favour USD/CAD primarily trading in a 1.32-1.34 range this year but see some room for a short-lived move down to 1.31 in April.”