VIEW: CIBC: No Great Leaps Towards First Cut

CIBC note “the Bank of Canada kept rates unchanged and didn’t make any great leaps towards an actual rate cut today.”

• “Its statement gave a nod to some signs that wage pressures are easing but balanced that by saying growth was a bit better than expected, while still weak.”
• “On inflation, while it mentioned that the overall pace had slowed, it judged that that underlying inflation pressures still persist, led by shelter, and maintained its message that it’s still “concerned” about that persistence, and wants to see more progress.”
• “It seemed to stick to its two official core inflation measures, with no mention of the better progress seen in measures like CPIX that strip out mortgage interest costs. “
• “Look for greater clarity to come in April’s Monetary Policy Report, which in addition to a fresh forecast, should show enough optimism in the battle against inflation to set markets up for a rate cut in June, assuming the data in the coming month point in that direction.”
• “But for now, the overall message is that itis too early to cut, and that they need to see more progress on inflation.”