The Bank of Canada will likely revise its growth and inflation forecasts lower in its MPR (Wednesday) and preserve an easing bias.
The BoC is expected to leave policy unchanged at 0.75% for now (consensus: 0.75%. market pricing: 0.75%), the market is significantly underpricing the risks of additional stimulus, with less than a full rate cut priced over the next year.
"We think there remains significant scope for re-pricing with a rate cut at this week's meeting remaining an outside risk. As a result, we recommend staying long USDCAD", Says Barclays
