Bank of Canada: what to expect?
Today is the last Bank of Canada’s meeting under Mark Carney (14:00 GMT). The BOC is expected to leave the benchmark rate unchanged at 1%. Carney’s successor Stephen Poloz takes over on June 3.
In April Carney said that “considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time,” while earlier in every statement during the last year the central bank warned that the next move on interest rates would be up. So, investors will be looking for the hints about further changes to the interest rates. We don’t think that this time the BOC will completely take off its hawkish stance as there hasn’t been enough improvement or deterioration in Canada’s economy to warrant a change in monetary policy.
Watch Canada’s Q1 GDP release on Friday (economists expect Canada’s economy to have by expanded 2.3% compared to 0.6% in the previous period, while the BOC lowered their estimate to 1.5%).