BOC TO HOLD RATES AT 5.00% IN APRIL AND STRIKE A CAUTIOUS TONE – TDS

Analysts at TD Securities (TDS) offer a sneak peek at what they expect from the Bank of Canada’s (BoC) policy announcement and how it could impact the Canadian Dollar.

Key quotes

"We look for the BoC to hold rates at 5.00% in April and strike a cautious tone as signs of renewed growth momentum prevent it from leaning too heavily into recent progress on underlying inflation."

"We are hard-pressed to find a strong narrative that argues against 2s5s and 5s30s steepeners. We see up to 50bps of value in receiving 1y1y, and further out the curve we feel the technical supply story is strong and clear, and we wouldn't want to bet against it."

"The BoC is likely to retain a cautious tone as it waits for more evidence before signaling the start of its easing cycle. The meeting is unlikely to materially move the CAD and data remains in the driver's seat."