CIBC Research discusses its expectations for tomorrow's BoC policy decision.
"In Canada, a desire to stay out of the limelight during a close election, and the need for a forecast revision in its October MPR, could tip the Bank of Canada into delaying its next tapering announcement to October," CIBC notes.
"That said, the fact that Macklem’s speech on Thursday is titled “QE and the Reinvestment Phase” leaves open the possibility of a tapering announcement this week. That won’t really surprise markets at this point, and nor, of course, will the decision to keep the overnight rate on hold. The BoC will have to comment on some of the recent GDP disappointments, while no doubt remaining optimistic on the medium term picture, and sticking to the view that the inflation uptick will be temporary," CIBC adds.