APR 5TH 2024

BoC Announcement (Wed):

Analysts expect the Bank of Canada to begin the rate-cutting cycle in June, and therefore, rates are expected to remain unchanged at 5.00% at the April policy meeting. Minutes from the March meeting suggested that the BoC was on the fence regarding the timing of rate cuts; policymakers think it is still too early to cut rates, but if the economy evolves in line with its expectations, then rate cuts may be seen sometime this year; that said, the minutes noted a "diversity of views" among officials about when there would sufficient evidence to start the cutting cycle. Ahead of the March meeting, analysts were of the view that there were greater risks that the first rate cut would come later than forecast rather than sooner than forecast. The Q1 business outlook survey revealed that 27% of firms surveyed expect Canada to be in a recession this year (down from 38% in Q4), and 40% of firms expect inflation to be above 3% for the next two years (down from 54% in Q4).