No rate cut from the BOC, as was mostly expected.

  • Risks to inflation outlook 'are now roughly balanced'
  • Bond market pricing suggested about an 8% chance of a cut

That's not as dovish as some people were looking for.


  • Sees return to full capacity at end-2016 (same as before)
  • Lowers 2015 growth estimate to 1.9% from 2.1%
  • Boosts 2016 to 2.5% from 2.4%
  • Lower oil to be more front-loaded than expected but overall impact will be the same
  • Ultimate size of oil price impact will need to be monitored closely
  • As oil shock wears off, stronger non-energy exports, investment and labor markets will re-emerge as dominant trend around mid-year
  • Weak Q1 has led to weakening of output gap but gap will be back on previous trajectory later this year as growth recovers
  • Boosts estimate of output gap by quarter-point
  • Raises total CPI forecast to 1.0% from 0.5% in Q1
  • Sees Q3 inflation at 0.8% vs 0.3% prior
  • Sees Q4 inflation at 0.9% from 0.5% prior

This sounds like the Bank of Canada isn't going to cut further. It's bad news for USD/CAD.