### POV: BOC STEADY AS DATA TRUMPS GLOBAL....>

CANADA: ### POV: BOC STEADY AS DATA TRUMPS GLOBAL SLOWDOWN YET AGAIN 

- Bank of Canada will leave target rate steady at 1.75% at its policy annc Wed,

Sep 4 at 1000ET (NO Monetary Policy Report). MNI PINCH model assigns 6% chance

of 25bps cut Wed (23.4% wk ago), 53.2% chance of cut on Oct 30.

- While many economists held off on making a policy call until after last

Friday's GDP, the stronger Q2 figure of 3.7%, as well as 2% inflation and low

unemployment has lead to a consensus opinion of no rate change for seventh

consecutive policy annc.

- Base case: Steady as long as economic data remains strong, while the bank will

likely remain cautious in making any waves ahead of the Canadian federal

election on October 21, and the next BoC on Oct 30 (MPR published).

- Dovish: Knock-on effect of global slowdown due to US/China trade war will

catch up to Canada sooner rather than later, spurring the BoC to join other CBs

in easing the target rate preemptively by 25bps Wed. 

- Hawkish: Most unlikely scenario - the BoC underscores strength of recent data,

resilience to global trade fears in its statement.