Bank of Canada: Looking for a relatively quiet meeting – TD Securities
|Next week, on Wednesday, the Bank of Canada (BoC) will have its monetary policy meeting. Analysts at TD Securities, expect a relatively quiet meeting. They consider the BoC will maintain the view that the outlook is evolving as expected and that inflation is transitory.
Key Quotes:
“We look for a relatively quiet BoC meeting, with limited scope for a meaningful change in tone. The BoC will maintain that the outlook is evolving as expected and that inflation strength is largely transitory. We do not expect any change to guidance, as the statement balances rising uncertainty over COVID & supply chain disruptions from BC floods against labour market strength.”
“A quiet BoC meeting shifts CAD drivers to the world at large. In turn, COVID uncertainty, heightened risk aversion, and a relatively poor local growth and mobility backdrop should keep USDCAD hanging around 1.28 for a bit longer. While we see too much pessimism priced into markets, it could a bit of time for things to settle down. Even so, we think the risk pullback will offer attractive entry levels for CAD against the likes of JPY and CHF in early 2022.”
“We expect a neutral BoC meeting, but note that Canada remains cheap to the US. It is important to recognize that we have moved from a divergence narrative with the US to a convergence narrative now; as such we want to maintain our long Canada bias.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.