BoC to keep policy rates unchanged - TDS

The analysis team at TDS is looking for the Bank of Canada to keep policy rates unchanged at its May meeting and suggests that the scope to alter the tone of the statement is limited amid continued weakness in core inflation.

Key Quotes

“The biggest update we expect is to remarks on the housing market, which should praise the recent macropru measures but also note that evolving risk factors are being monitored. We look to the Bank's June 8th Financial System Review for a broader analysis of the housing sector.”

“Our baseline view is for the BoC to lift rates in April 2018. But waiting late in the cycle for the housing market to self-correct and slack to be further absorbed is an increasingly risky proposition. We believe that the balance of risks skews towards earlier tightening.”