BoC: Six major banks expectations for the Interest Rate Decision

Today, the Bank of Canada (BoC) Interest Rate Decision scheduled at 14:00 GMT will mark the first day on the job for the new Governor Tiff Macklem as  |  03/06/2020 09:38

Today, the Bank of Canada (BoC) Interest Rate Decision scheduled at 14:00 GMT will mark the first day on the job for the new Governor Tiff Macklem as he takes over from Governor Poloz. As we get closer to the release time, here are the expectations as forecasted by the economists and researchers of six major banks, regarding the upcoming announcement. The market consensus is the Boc to leave the rates unchanged at 0.25%.

You can't miss the BoC Preview by Yohay Elam

Rabobank

“When it comes to the rate decision itself, Macklem probably doesn’t have much to decide- we are of the view that the policy rate will be left at 0.25% for the remainder of this year and all of 2021. We do not see any changes to the BoC’s asset purchase and liquidity facilities.” 

TDS

“We look for the BoC to keep the overnight rate unchanged at 0.25% and hold back on any changes to its major liquidity programs (LSAP, PBPP, CBPP), although there is some scope for the Bank to scale back less utilized programs. The statement should maintain a cautious tone, even if acknowledging that conditions are evolving in line with the Bank's less pessimistic scenario from April, while the forward-looking portion should repeat that the Bank stands ready to adjust its programs if necessary.”

CIBC

“The BoC sees the 0.25% rate as the effective lower bound, so the only content in its policy announcement would be in what, if anything, it says about its asset purchases. Much of the Bank’s current holdings are in short-term securities that will roll off the books in the months ahead. With short-rates now well anchored, at some point, it could seek to redeploy those funds further out the curve, where they would be of more help as an offset to government issuance in holding yields down.”

ING

“The BoC officially changes its Governor during Wednesday’s meeting. Poloz managed to calm markets and provide adequate stimulus to the economy (which shrank 8.2% in 1Q) through a qualitative and quantitative vast QE. Despite a more optimistic outlook compared to the last BoC meeting, new Governor Tiff Macklem may well aim at a smooth tradition and refrain from providing indications that there is any plan to reduce the current degree of stimulus. We expect little surprises from the BoC meeting and the impact on CAD to be relatively short-lived.”

NBF

“Judging from recent comments made by Bank officials, we don’t anticipate any further movement on rates. Non-conventional policies should also remain unchanged; policymakers are expected to merely take stock of the extraordinary measures introduced in the past few weeks. Although we doubt it will come at next week’s meeting, policymakers are expected to provide more guidance as to the future trajectory of their main policy tool sometime in the near future, perhaps tying an eventual increase in rates to specific economic data such as inflation or the unemployment rate. The meeting will also mark Tiff Macklem’s first public apparition as Governor of the BoC.”

RBC Economics

“We think it’s unlikely that the BoC will feel the need to tweak or add to its current programs, particularly as the new provincial and corporate asset purchase programs announced at its April meeting are just ramping up now. We’ll be watching the statement for the Governing Council’s thoughts on the evolving economic outlook. The speed and scale of the recovery in the second half of 2020 will be an important factor in the next phase of the BoC’s monetary policy response to the COVID-19 crisis.”

 

Share

Popular News

Show More Popular News

Market Insight's Views

Market Insight analyses will provide both fundamental and technical comprehensions on FX
and other asset classes for Market Insight viewers

RISK WARNING

The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you then this should be solely at your discretion and GKFX will not be held accountable in any way.

  • ForexF
  • IndicesI
  • CommoditiesC
        Back

        Login to Market Insight Account

        Your Market Insight account gives you access to the tools that we offer our customers including our
        Technical Studies & Sentiment for your accounts.

        Forgot Password?

        Don't you have a Market Insight account? With a few easy steps you can easily register to Market Insight

        Create a Market Insight's Account

        Your Market Insight account gives you access to the tools that we offer our customers including our Technical Studies & Sentiment for your accounts.

        register_ty

        Thank you!

        Welcome to Market Insight family!

        You have succesfully completed the registration.
        We will send you an e-mail to give you some
        instructions and our Terms and Conditions!
        Our account representatives will be contacting you as
        soon as possible. If you have any further questions
        please do not hesitate to mail us via info@marketinsight.com