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TD Securities analysis team is looking 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.

Key Quotes

“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.”

“At 8:30 we will get international trade for December which was delayed by the US government shutdown. TD looks for the deficit to widen to $2.8bn from $2.1bn in November (market: -$2.1bn).”

“Ivey PMI (Feb) and labour productivity (Q4) will round out the data calendar.”