I absolutely love a line in a note from Desjardins regarding today's Bank of Canada decision.
“The Bank of Canada is in no position to pivot just yet. Instead, expect policymakers to drop some breadcrumbs about the potential for an earlier pause than markets expect,” they wrote in a note.
The statement is due at the top of the hour with a press conference from Macklem an hour later. Notably, we also get the MPR this time around, so there will be new forecasts.
The strong consensus is for 75 bps to 2.25% but there's a decent chance priced into the market of 100 bps.
USD/CAD has been reluctant to push higher this week despite plunging oil prices and I think rate differentials are a big part of that. The pair was last at 1.3012.
If we do see some 'breadcrumbs' building towards a pause or slowdown in the pace of hikes, the loonie could fall but I would als osee that as a preview of the playbook from the Fed at the end of the month.
