BoC Preview: Major Banks expecting no fireworks today
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BoC Preview: Major Banks expecting no fireworks today

Today, we have the Bank of Canada meeting scheduled at 1500 GMT, and as we get close to the decision timings, here are the expectations regarding the outcome as forecasted by the economists and researchers of 5 major banks for the upcoming meet.

Most of the economists are expecting the Bank of Canada to keep rates steady and suggest that the language of the Governor Stephen Poloz will be analysed carefully for future guidance.

TD Securities

“TD looks for the Bank of Canada to hold rates unchanged at 1.75% as disappointing Q4 GDP complicates what had originally looked like a placeholder meeting. This may challenge Pololz’s conviction on future rate hikes and while we expect the Bank to leave forward guidance unchanged for now, the poor GDP introduces a material risk that they will abandon the pretense of further tightening given their adherence to data-dependent monetary policy (see Trading the BoC).”

National Bank of Canada

“We expect the Bank of Canada to stay on the sidelines this time, possibly following the Fed’s lead in evoking global uncertainty and controlled inflation as reasons to stay patient.”

“GDP growth, which the Bank expects to stay relatively subdued in Q1, should provide yet another incentive to hold rates steady. Although no press conference is scheduled following the announcement, a speech set to be delivered by Deputy Governor Patterson on Thursday should provide some valuable insight.”


“We expect the BoC to keep the overnight rate target unchanged at 1.75% on Wednesday and retain its cautious, data-dependent stance, with the view that interest rates will need to rise toward neutral over time.”

“The downside risks to the outlook that had been identified by the monetary policy committee remain lower oil prices that have weighed on the energy sector, business investment and headline inflation; uncertainty about global trade and risks of further protectionism; and indebted households and slowing housing market.”

“There have been positive developments since the January meeting, which could be noted in the policy statement: oil prices have partially recovered, the US and China extended their trade ceasefire, and job creation has kept a solid pace. Data last week, however, reinforced the need to be patient to evaluate the depth and broadness of the oil-induced slowdown.”

“GDP surprised to the downside, driven by falling business and residential investment, in line with the BoC’s January assessment, but it also showed slowing consumption. The bank will need time to monitor the pace of economic activity and is unlikely to change its rhetoric at this meeting.”  


Analysts at Rabobank are expecting the BoC to leave the policy rate unchanged at 1.75% on Wednesday, 6th March.

“This is unanimously expected by the 21 analysts surveyed by Bloomberg and 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.”


“The Bank of Canada meeting is likely to be a non-event when it comes to a change in the policy rate. That said, the language that Governor Stephen Poloz uses in his press release will be analysed carefully.”

“We hope some light will be shed with regard to the BoC’s tone, and whether there’s an indication that monetary tightening is still deemed the appropriate course of action this year.”

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