September 02, 2024 17:47 GMT
CANADA: National See Increasingly Dovish BoC Bias Intact
CANADA
- National expect the BoC to cut its overnight rate target another 25bps on Wednesday.
- “The only data point that had the potential to derail a cut—the July CPI report—offered encouraging news on the core inflation front, allowing policymakers to ease without controversy.”
- “With 2% inflation in sight and slack clearly accumulated in the economy, the Bank’s increasingly dovish bias will remain intact. That’s most likely to manifest as a restatement of earlier guidance that it’s “reasonable to expect further cuts” so long as inflation continues to moderate.”
- “Expectations for easing at the final two meetings of the year should therefore endure, and markets will probably want to discount the outside chance of larger cuts especially if the BoC places more emphasis on risks of inflation undershooting over the projection horizon.”
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