Bank of America expect the Bank of Canada to cut in June, citing core inflation that keeps on falling and the labour market that keeps on softening.
BoA note there is one more CPI reading prior the BoC June 5 meeting, But:
- The risk to our call is that the BoC waits and delays the cut until July (there are three inflation prints before the July meeting).
More:
- We believe the BoC can cut even if the Fed takes longer to cut
- In our view, only an unexpected upward trend in core inflation or a big increase in the fiscal deficit could derail a BoC cut this summer.
- Another risk is much higher oil prices.
- We expect the policy rate at 3.75% by end-2024.
BoC rate:
This article was written by Eamonn Sheridan at www.forexlive.com. Source