BoC Preview: Status quo with downside risks for CAD - BNP

FXStreet (Delhi) – Research Team at BNP Paribas, are anticipating BoC to maintain status quo in today’s policy meet in line with market consensus and suggest that Monday’s election outcome should lead to further fiscal spending over the next three years, which would imply less need for monetary accommodation.

Key Quotes

“Nevertheless, we see more downside than upside risks to the CAD around the announcement. BoC communication has been consistently optimistic since the September meeting; the October statement could turn a bit more cautious, reflecting new macroeconomic projections in the quarterly Monetary Policy Report that will be updated to reflect the drop in oil prices since the July meeting as well as weaker growth in the major trading partners.”

“Moreover, positioning is more balanced with shorts cut by half over the past month according to our BNPP FX positioning analysis.”