Key Rate Decision in Canada
Today, we will be essentially focusing on the Bank of Canada’s Governor Stephen Poloz, who will announce at 10 a.m. the Bank’s key rate decision. Markets are not expecting any changes, with the rate being maintained at 0.5%. The loonie only fluctuated by some 50 basis points during the night, this despite crude oil prices falling by more than 1%.
In a longer-term perspective, many analysts are in agreement that the changing of the guard in Ottawa—from a Conservative government that had adopted austerity to a Liberal government that is planning on stimulating the economy with deficits—should allow the BoC to diminish its interventions in support of the economy. In this sense, Canada will be a lone ranger, as most developed countries are relying on interventions from their central banks to stimulate growth rather than using fiscal measures. This will be an interesting file to monitor in the coming months.
