BoC preview: More false hope - Rabobank
"We expect the Bank of Canada to leave the policy rate unchanged at 1.75% on 9th July," note Rabobank analysts previewing tomorrow's meeting.
"This is expected by 22 of the 23 analysts surveyed by Bloomberg and CAD OIS implies almost no chance of a move in either direction at the July meeting."
"The Bank was a little more optimistic in its last meeting compared to back in April and this week’s meeting is likely to see Poloz highlight a stronger backdrop while discussing implications of a potential US ‘insurance cut’ later this month.
It is unlikely that Poloz will discuss rate hikes but wait-and-see will be the name of the game."
"We have maintained the same view since Q1 and we see little reason to change it at this stage – to our mind, the likely next policy move will be a cut in 2020 Q2."
"In terms of USD/CAD, the combination of interest rate differentials and oil prices have pushed the pair lower but there hasn’t been a confirmed close below 1.3070 (the pair has closed below there once) and so we maintain the view that the pair is likely to move back above 1.32."
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
