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The Scotiabank analysts offer a sneak peek into what to expect from Friday’s US labor market report slated for release at 1400 GMT.

Key Quotes:

“No rate change is expected.  

The broad concluding bias is likely to be something similar to how “the degree of accommodation being provided by the current policy interest rate remains appropriate” with a data-dependent watch mode continuing.

The broad narrative in favor of a rebounding domestic economy in the second quarter is well on track. So is guidance provided in the May 29th statement that “Core inflation measures all remain close to 2 percent” and indeed the latest figures average a tick north of that

Key may be how the BoC views external risks that it warned had increased in May.  

Further, watch for key guidance toward Q3 GDP. Recall that the BoC only forecasts out a quarter at a time and the April MPR published quarterly GDP growth up to 2019Q2. While it has to revise up that 1.3% estimate for Q2 to something that would probably be deep in the 2s perhaps bordering upon 3%, how the BoC views the durability of this improvement relative to potentially temporary and distorted drivers is key by way of assessing 2019H2 risks.”