Japan Services Producer Prices Rise 3.2% in June, Supporting BOJ Rate Hike Expectations 
Eurozone Bond Yields Fall as Oil Slump Eases Inflation Fears Ahead of Central Bank Meetings 
Japan PM Sanae Takaichi Unveils Growth Plan as BOJ Independence Concerns Lift Bond Yields 
Singapore Central Bank’s Exchange Rate Policy Explained: Why MAS Uses the S$NEER Instead of Interest Rates 
BOJ Holds Rates at 1% as Inflation Outlook Eases, October Rate Hike Still Possible 
Fed Holds Interest Rates Steady as Kevin Warsh Says Rising Treasury Yields Tighten Financial Conditions 
BOJ Seen Holding Rates at 1% While Keeping Inflation Risk Warning 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Add as a preferred source on Google
Market attention will focus on the BoC meeting this Wednesday. The effects of low oil prices are still being felt on the economy, which officially slid into recession in Q2. Despite decent behavior of consumption and a still-resilient labor market, which will likely be highlighted by the BoC, there are significant downside risks to economic activity.
Continued weakness in the energy sector has depressed investment, which is expected to remain subdued for the rest of the year. Weakness in the price of commodities is expected as nervousness about China dominates the price action.
Canadian oil producers face very high extraction costs, and tight margins due to low oil prices will likely continue to slow capital expenditure, hurting aggregate investment even further.
The BoC will likely highlight the brighter side of the picture, and we expect it to keep its overnight lending rate unchanged at 0.5% (consensus: 0.5%).
With no other major data releases, the looney should remain range-bound, with downside risks due to oil price movements and concerns about the global outlook.
