Changes to the BOC forecast
- 2020 -5.5% vs -5.7% in Oct
- 2021 +4.0% vs +4.2% in Oct
- 2022 +4.8% vs +3.7% in Oct
- 2023 +2.5% (there was no forecast for 2023 in Oct)
That's a small shift better last year and a big shift higher in 2022. If that comes to fruition, the BOC is going to be hiking in 2022. They see inflation at 2.1% in 2023 in the first forecast for that year. The forecast sees much higher consumption and government spending in 2022 than previously.
The BOC decision has hit at the same time as a broader jump in sentiment. US equities are soaring to a record and that's lent a broad bid to commodity currencies.
With that and the BOC decision, USD/CAD is flirting with the January 14 low, which was also a multi-year low. Watch for more stops on a break, this looks like it could be the start of a big move, but you have to be wary of a surprise from Poloz, which could undermine the move.