Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
MNI Point of View: June a Stepping Stone to July's Live Meeting
This month's Bank of Canada rate decision is expected to come and go with little fanfare. June's decision comes without fresh economic projections or a Monetary Policy Report, leaving just a small statement and the headline policy decision. No material policy announcements are expected, leaving markets to focus on July's release, in which the Bank are seen tapering their asset purchases further.
The April policy statement outlined the BoC's view that incremental progress is being made in the post-pandemic recovery, with the vaccine rollout and global economic upswing supporting Canada through to end-2021. While the Bank stated that Canada's economic performance exceeded expectations in Q1, persistent restrictions on activity from lockdowns across Ontario and a slow starting vaccine programme left the Q2 picture more mixed. This leaves the Bank's forecast for spare capacity to be exhausted at year's end a little less concrete, but an uptick in activity in the latter half the year should keep the policy path across the medium-term untroubled.
This view is well-baked into sell-side expectations for BoC policy this year, with July seen as the most opportune time for the BoC to taper asset purchases further (likely down to C$2bln from C$3bln currently) with asset purchases then gradually phased out headed into the end of 2021. Rate hikes are then expected to follow from mid-2022 onwards.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.