Bank of Canada still set to lean dovish
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CANADA: Falling output, USMCA renegotiation risk, a mixed jobs picture, and softer-than-feared inflation suggest the Bank of Canada will continue to push back against the market pricing of rate hikes at its 10 June meeting. We don’t expect any tightening this year. The Canadian d
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4 itemsBank of Canada still set to lean dovish
Bank of Canada still set to lean dovish
Forward Guidance: Bank of Canada to hold interest rates as prices rise but economy wobbles
Per the full note [source], RBC Economics expects the Bank of Canada to hold rates steady on June 4, 2025, following a close call after April's pause. The decision is supported by upside inflation surprises and stabilizing consumer spending, while labor market weakness and trade risks argue for a cut. The bias is dovish hold, with market focus on Friday's employment report and Thursday's trade data for confirmation of the economy's trajectory.
Monthly Executive Briefing: A tale of two economies
The desk posits that diverging economic narratives between the U.S. and Canada support a more bullish stance on CAD against the USD in the medium term. Per the full note from RBC, the Canadian economy is showing signs of resilience, underlined by robust employment figures, while the U.S. faces potential growth headwinds as interest rates plateau. This contrast is pivotal for traders, especially against the backdrop of recent central bank meetings that have left rates unchanged amid mixed economic signals.