A preview of the Bank of Canada meeting this week, on Wednesday 15 July 2015 . Any announcement will come at 10am Tim Hortons Ottawa time (1400GMT)
Stephen Poloz is the Bank of Canada's governor. Will he announce a rate cut?
- Poloz surprised markets in January with a cut, to 0.75%
- Recent economic indicators are suggesting the Canadian economy might well have contracted for a second straight quarter
- Poloz and friends at the BOC have been saying, though, that they expect the economy to rebound somewhat in H2
- OIS markets (last I checked) were pricing in the probability of a cut at around 40%
Market pricing is looking for a cut this year, though:
- Pricing in a 75% chance by September
- And 100% by December
The Bank is also publishing its latest Monetary Policy Report, along with Wednesday's decision
- Its expected to cut growth forecasts sharply
- 2015 GDP growth downgraded to around 1.3% from 1.9%
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Some comments from banks on Wednesday's decision ...
BofA Merrill Lynch:
- Expect the BoC to remain on hold this month, but will cut probably in October ... when it becomes apparent that a robust pick-up in 2H is not materializing .... they say
Bank of Nova Scotia economist Derek Holt:
- We'll call this the Great Canadian Non-Recession
- GDP growth is perhaps being temporarily disrupted by the worst and typically concentrated effects of the drop in oil prices, a harsher-than-usual winter and spillover effects on North American supply chains of the strikes that crippled West Coast ports in the U.S.
- The country is not in recession in any meaningful or broadly defined way at this point