Bank of America Global Research discusses its expectations for today's BoC policy meeting.
"We think the Bank of Canada (BoC) is likely to keep its highly accommodative policy in the following months and to stand ready to increase support if needed. Once vaccines are widely available, economic activity should improve markedly while policy support in the US and in Canada is likely to continue, so we are constructive on the economy and see 5.0% GDP growth next year," BofA notes.
"In this context we expect a status quo decision by the BoC this week to maintain rates at current levels, reiterate forward guidance (through 2023) and guide toward purchases of C$4bn a week skewed toward longer-term bonds, as articulated at the last meeting. A status-quo BoC implies a subdued reaction in rates and FX," BofA adds.