Bank of America Global Research discusses its expectations for tomorrow's BoC policy meeting. 

"We expect the Bank of Canada (BoC) to hike the overnight rate by 50bp to 1.50% at the 1 June meeting...Going forward, we expect the BoC to hike by 50bp in July and then to continue hiking 25bp at each subsequent meeting until it reaches 3.50% in April 2023. We see June and July on "autopilot", with the BoC reassessing in Sep. We see upside risks to our BoC call. We see risk of rates widening USD vs CAD. CAD should continue to benefit from BOC hikes," BofA notes. 

"USDCAD had pushed above 1.30 over the past few weeks, driven by higher risk aversion and a softening in energy prices. However, it has since moved below 1.28, and has been consistent with our overall modestly positive CAD outlook, with a year-end forecast still at 1.23. The BoC rate hikes should prove further supportive for the currency, in our view," BofA adds.