BoC: Universally expected to leave rate unchanged at 0.50% - RBC CM

Adam Cole, Head of G10 FX Strategy at RBC Capital Markets, suggests that today’s BoC (no press conference or MPR) is universally expected to leave rate unchanged at 0.50%.

Key Quotes

“Key events since the April 13th forecast update include non-energy goods export growth at flat y/y, soft private CapEx intentions for 2016 (-10.9% y/y for manufacturers,) and of course the impact of the Alberta wildfires.

We expect the Bank to look through the transitory economic impact of the latter—Q2 growth will likely be downgraded at the next forecast round in July, while Q1 growth looks set to be close to their most recent forecast of 2.8% q/q annualized.

The BoC is likely to note that movements in the Canadian Dollar (~2 cents stronger than assumed in April) are consistent with fundamentals, including commodity prices.”