The Globe and Mail reports in its Monday, April 13, edition that this week's
Monetary Policy Report (MPR) will contain
perhaps the Bank of Canada's
most important projections in
years. The Globe's David Parkinson writes that it has been three months since
the BOC stunned
markets with a quarter-percentage-point cut in its
key interest rate, accompanied by
a quarterly MPR that drastically reduced
the bank's economic growth
expectations for the first half of
the year. The fact that the bank
felt the damage from the oil
shock was potentially severe
enough to warrant the first rate
cut in nearly six years was a
harsh pill indeed. Mr. Parkinson says the financial
markets almost immediately
girded for a second cut.
That belief, however, has eroded
in the intervening
months. As of the
end of last week, the bond market
was pricing in only about a
10-per-cent chance of a cut in the
April rate decision, due this
Wednesday morning. Traders, however, still predict another
cut is likely in the second half of
the year.
That view, however, will hinge on the bank's new economic
projections for 2015, which
will be released in the quarterly
MPR on Wednesday at the same
time as the rate decision.
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