BoC: Optimistic dove or downbeat hawk - Rabobank

Rabobank analysts point out that the Bank of Canada left the policy rate on hold at 1.75% yesterday, which was as expected by both implied market pricing at the front-end of the CAD OIS curve and by the vast majority of analysts surveyed by Bloomberg (24 out of 24).

Key Quotes

“The Bank had already shifted to the dovish side but the tone of the accompanying statement was a little more optimistic than the April meeting. That said, there was no shift back to a tightening bias and the Bank maintained a data-watch stance.”

“This meeting did little to alter our view that the BoC is too optimistic about activity prospects looking forward and we maintain the view that the BoC will begin easing in Q2 2020.”