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Bank of Canada likely to keep overnight lending rate unchanged in May

The Bank of Canada is set to meet next week for its monetary policy decision. The central bank is likely to keep its overnight lending rate on hold at 0.5 percent in terms. The larger issue is whether the bias would be incrementally changed, especially in the context of a pile-on that has been shorting the Canadian dollar and going long on the front-end of the Canada curve at least until very recent developments, noted Scotiabank in a research report.

The economic growth is currently tracking around a 4 percent annualized print that is consistent with revised expectations of BoC last month and a bit higher than the 2.5 percent projection in January. Economic growth has surpassed everyone’s projections in the first quarter as compared to the beginning of the year.

Meanwhile, the central bank is expected to reiterate that subdued first quarter economic growth of the U.S. was temporary and that the economic growth drivers continue to be strong, stated Scotiabank. Very early tracking of the second quarter growth data underpins a materially stronger economy than the paltry 0.7 percent annualized growth in the first quarter.

“Clearly US political and policy risks overhang the outlook for markets and the US economy such that the BoC won’t be signaling any greater optimism at this highly uncertain juncture”, added Scotiabank.

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May 26 14:30 UTC Released

USECRI Weekly Annualized*

Actual

5.1 %

Forecast

Previous

5.0 %

May 26 14:30 UTC Released

USECRI Weekly Index*

Actual

144.1 %

Forecast

Previous

144.5 %

May 28 15:00 UTC 26532653m

SAM3 Money Supply YY*

Actual

Forecast

Previous

0.0 %

May 28 15:00 UTC 26532653m

SAPvt Sector Loans YY*

Actual

Forecast

Previous

-0.1 %

May 29 08:00 UTC 36733673m

EZLoans to Households*

Actual

Forecast

Previous

2.4 %

May 29 08:00 UTC 36733673m

EZLoans to Non-Fin

Actual

Forecast

Previous

2.3 %

May 29 08:00 UTC 36733673m

EZMoney-M3 Annual Grwth*

Actual

Forecast

5.2 %

Previous

5.3 %

May 29 23:30 UTC 46034603m

JPAll Household Spending MM*

Actual

Forecast

1.1 %

Previous

-2 %

May 29 23:30 UTC 46034603m

JPAll Household Spding YY*

Actual

Forecast

-0.7 %

Previous

-1.3 %

May 29 23:30 UTC 46034603m

JPJobs/Applicants Ratio

Actual

Forecast

1.46 %

Previous

1.45 %

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