CAD: BoC in for another 25bps cut in rates – TDS

By FXStreet FXStreet (Delhi) – Research Team at TDS, suggests that in what is admittedly a close call, TD expects the Bank of Canada to cut its overnight rate by 25bps to 0.25%.

Key Quotes

“The motivation reflects a larger-than anticipated drop in commodity prices paired with a disappointing outturn from other segments of the economy. The impact on economic growth sees a larger output gap that will remain in place over a longer horizon than envisioned back in October.

While the sharp depreciation in the currency and prospective fiscal stimulus suggest the Bank could remain on the sidelines, viewing monetary policy as an act of risk management warrants a more pre-emptive response.

Though it will be thoroughly ignored by the market, manufacturing and wholesales sales for November will also be released. TD is in line with the market for manufacturing sales (+0.5% m/m) and has identified a downside risk to wholesale sales (flat versus the market at +0.4% m/m).”
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Source:: FX Street