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%

-

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