In Canada, the central bank will take center stage next week, point out analysts at National Bank of Canada. The Bank of Canada is expected to remain in pause and they see it reiterating the need to kept it below it neutral range.
“In addition to Wednesday’s interest rate announcement, the Bank of Canada will also release its Monetary Policy Report showing its latest economic projections. A significant upward revision to its Q2 GDP growth forecast is expected considering the strength of recent economic data. That could in turn lead to a slight upward revision to the full-year growth forecast for 2019. “
“As for the statement, the BoC may follow the lead of other central banks and put emphasis on global uncertainties while acknowledging the latest trade truce between the U.S. and China. But there’s a limit to how dovish it can sound without appearing out of touch with domestic data.”
“We expect the central bank to remain in pause mode and reiterate the need to maintain the overnight rate below its neutral range. There a risk though that even a balanced approach might sound hawkish to markets in comparison to the dovish turns performed by other central banks lately. For this reason, we’d suggest keeping an eye on the Canadian dollar on the day of the announcement.”