BoC preview: More false hope - Rabobank

"We expect the Bank of Canada to leave the policy rate unchanged at 1.75% on 9th July," note Rabobank analysts previewing tomorrow's meeting.

"This is expected by 22 of the 23 analysts surveyed by Bloomberg and CAD OIS implies almost no chance of a move in either direction at the July meeting."

"The Bank was a little more optimistic in its last meeting compared to back in April and this week’s meeting is likely to see Poloz highlight a stronger backdrop while discussing implications of a potential US ‘insurance cut’ later this month.
It is unlikely that Poloz will discuss rate hikes but wait-and-see will be the name of the game."

"We have maintained the same view since Q1 and we see little reason to change it at this stage – to our mind, the likely next policy move will be a cut in 2020 Q2."

"In terms of USD/CAD, the combination of interest rate differentials and oil prices have pushed the pair lower but there hasn’t been a confirmed close below 1.3070 (the pair has closed below there once) and so we maintain the view that the pair is likely to move back above 1.32."