Charles St-Arnaud, Research Analyst at Nomura, suggests that the BoC is expected to maintain neutral policy stance while all eyes will be on estimate of increased fiscal spending. Key Quotes “The Bank of Canada (BoC) holds its next policy meeting on 13 April. At the 9 March meeting the BoC left its policy rate unchanged at 0.50% and noted “the risks to the profile for inflation are roughly balanced” and that “the Bank’s Governing Council judges that the current stance of monetary policy is appropriate”, suggesting a neutral policy stance and that the BoC is not considering further easing. With the economic data suggesting better growth but continued uncertainty, we believe that the BoC will keep its policy rate unchanged at next week’s meeting and will reiterate its neutral policy bias. However, the focus at the meeting is likely to be on the Monetary Policy Report, as it will include an analysis of the impact of the fiscal stimulus on the economic outlook. We think the BoC is likely to find that the impact on growth from the Budget is slightly lower than the government estimates. We believe that the upgrade to the growth outlook because of the better starting point and the impact of fiscal spending means that the BoC is likely to expect the output gap to close by the end of 2017.” For more information, read our latest forex news.