1. Hello Guest Click here to check FX Binary Point Financial Directory

CAD: Setting up for Bank of Canada - TDS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 13, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    Analysts at TD shares the universal consensus expectation for the Bank of Canada to hold its overnight rate unchanged at 0.50%.

    Key Quotes

    “The focus will therefore fall to the tone of the communique and the accompanying MPR (Governor Poloz will also give a press conference later in the morning). Despite a positive turn in the domestic data, TD expects that the Bank will err on the side of caution in noting a more challenging outlook over a longer horizon. This echoes recent rhetoric from the Federal Reserve and the IMF and will be reflected in prospective forecast revisions raising 2016Q1 substantially (and filter into a higher annual average for 2016) but cutting growth in 2017 above and beyond the lift from the fiscal stimulus announced in the Federal Budget. The net impact, including a positive adjustment to potential output reflecting government infrastructure investment, could result in pushing the closure of the output gap into 2018.

    A key uncertainty is how the Bank will address the currency which is exerting around a 0.5% drag on growth relative to January. The Bank is expected to acknowledge a stronger currency as a statement of fact but will stop short of expressing explicit concern. Collectively the Bank's message will be interpreted with a marginally dovish bias though those looking for an even more aggressive message designed to weaken the currency will be disappointed.”
    For more information, read our latest forex news.

Share This Page