RBI Holds Interest Rates at 5.25%, Cuts India Growth Forecast Amid Rising Global Risks 
South Korea Central Bank Holds Interest Rates Steady Amid Inflation Concerns 
Jerome Powell Warns Against Politicizing the Federal Reserve, Defends Democratic Institutions 
BOJ Raises Interest Rates to 31-Year High, Signals Strong Focus on Inflation Risks 
ECB Keeps July Rate Options Open Amid Iran War Energy Price Risks 
South Korea Signals Possible Interest Rate Hike as Inflation Remains Elevated 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
RBNZ Holds Interest Rates Steady but Signals More Hikes Ahead in 2026 
BOJ Signals More Rate Hikes as Inflation Risks Rise Amid Energy Price Pressures 
Market attention will focus on the BoC meeting this Wednesday. The effects of low oil prices are still being felt on the economy, which officially slid into recession in Q2. Despite decent behavior of consumption and a still-resilient labor market, which will likely be highlighted by the BoC, there are significant downside risks to economic activity.
Continued weakness in the energy sector has depressed investment, which is expected to remain subdued for the rest of the year. Weakness in the price of commodities is expected as nervousness about China dominates the price action.
Canadian oil producers face very high extraction costs, and tight margins due to low oil prices will likely continue to slow capital expenditure, hurting aggregate investment even further.
The BoC will likely highlight the brighter side of the picture, and we expect it to keep its overnight lending rate unchanged at 0.5% (consensus: 0.5%).
With no other major data releases, the looney should remain range-bound, with downside risks due to oil price movements and concerns about the global outlook.
