The Bank of Canada will set interest rates on Wednesday. What decision can we expect from policymakers?
Here is their view, courtesy of eFXdata:
CIBC Research discusses its expectations for the BoC policy meeting this week.
The evidence from the west coast of the US over the weekend makes it apparent that there has been fairly wide spread infection with the coronavirus in that region (two deaths, with a death rate of 2%, implies that there could a hundred cases in the state of Washington alone), making a spread within Canada inevitable. The Bank of Canada can no longer say that events are proceeding in line with their forecast (even just in terms of the drop in oil prices and a big hit to tourism and exports markets),” CIBC notes.
“While a rate cut is far from an ideal weapon, it couldn’t hurt, and the US is clearly poised to cut this month. Waiting until April, our prior call, would look out of synch with the evidence. So we’re looking for a quarter point cut by the BoC this week, a further cut in April, with a 75 bp reduction in total for the year, expecting the Fed to match that,” CIBC adds.
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