BoC to leave rates on hold at 1.25% - Rabobank
|Christian Lawrence, Senior Market Strategist at Rabobank, fully expects the Bank of Canada to leave rates on hold at 1.25% today.
Key Quotes
“20 of 23 analysts surveyed by Bloomberg expect no change and the OIS market implies an 18% chance of a 25bp hike. We do not expect the Bank to hike rates again this year although there is significant risk of a July move if data allow.”
“OIS implies a 73% chance of a 25bp hike in July and a 92% chance of a hike by year end.”
“We expect domestic activity data will continue to sour and that price pressures will ease as we head into H2 which will prevent the Bank from hiking.”
“This meeting will be accompanied by a new Monetary Policy Report containing the Bank of Canada’s new growth and inflation forecasts.”
“NAFTA remains a key risk but the market seems to be trading as if an agreement is likely to be forthcoming in the coming weeks and this remains our base case.”
“USD/CAD completed the head and shoulders formation we highlighted a few weeks ago which provided a target of 1.2508. USD/CAD touched a low of 1.2545 and has traded a range between that and the 200dma at 1.2625 over the past four sessions. Oil remains supportive.”
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.