This will be Canada’s week in relation to macro developments elsewhere, assuming geopolitical risks don’t play a spoiler role.
The Bank of Canada’s latest decisions and bias will combine with top shelf macro data like CPI, retail sales and manufacturing shipments to shape the market tone at the front-end of the Canada curve and for the currency for some time conditional upon evolving NAFTA discussions. A cautious line is expected from the BoC alongside generally solid inflation and activity readings. We think the broad takeaway should not be inconsistent with our expectation for another rate hike in Q3.
The Bank of Canada issues a full set of updates on Wednesday. No rate change is expected and guidance is expected to be cautious in nature. A policy statement and rate decision plus the Monetary Policy Report that includes revised forecasts will be released at 10am ET and followed by a press conference at 11:15am ET that is always hosted by Governor Poloz and his Senior Deputy Governor Wilkins. There is also the usual risk of media interviews afterward and with that goes volatility at the front-end and CAD that may persist from 10amET into the evening.
READ WEEK AHEAD: GLOBAL WEEK AHEAD SCOTIA APRIL 13