Quotes from Lloyds Bank:
-Recent rhetoric from Bank of Canada Governor Poloz has prompted the market to pare back expectations of a rate cut at next week's policy meeting (4 Mar). 2yr rate spreads have now moved in favour of CAD, and are back in line with USD/CAD.
-Canadian CPI could attract some interest this afternoon, headline inflation is expected to fall to 0.8% y/y in January; however, core CPI is expected to remain firm.
-This is broadly in line with the latest BoC projections and therefore in the absence of a major surprise, the data is unlikely to trigger much market reaction, especially as the Bank's concerns have shifted towards economic growth. This suggests next week's Q4 GDP release will be a greater focus.
