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“We expect the BoC will leave the overnight rate unchanged on Wednesday, in line with market expectations,” TD Securities said previewing tomorrow’s BoC meeting.  

Key quotes

“The communique is likely to have a dovish tilt to it, as the recent deterioration in economic data ought to outweigh the impact of higher oil prices.”

“Our base case is for the Bank to leave their forward looking language mostly unchanged, warning of higher policy rates over time subject to the evolution of the data.”

“Still, the GDP figures do raise valid questions over the Bank’s ability to tighten further, and as such we see a material risk that the Bank pivots to a purely neutral policy stance. We are therefore biased towards long positions in CAD front-end rates and higher USDCAD ahead of the release.”