BoC: Not Expected to Change Policy - BBH
Research Team at BBH, suggests that the Bank of Canada (BoC) meets this week, and is not expected to change policy.
Key Quotes
“The
stronger than expected March employment data reported before the
weekend prompted some observers to rule out another rate cut, but the
market had already come to this conclusion.
In fact, the
Canadian dollar's rally since multi-year lows (reached at the end of
January) saw the implied yield of the June 2016 BA futures rise from 50
bp to 90 bp. The 40.6k increase in Canadian employment (four-times more
the Bloomberg consensus) was insufficient to lift the implied yield of
the June BA futures further. The Canadian dollar has appreciated by
more than 12% on a trade-weighted basis since the end of January.
The
Bank of Canada may revise up its GDP forecasts in light of recent
economic data and the more stimulative budget. However, it may also
caution the market against prematurely tightening financial conditions.”
(Market News Provided by FXstreet)
