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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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2017-09-22 21:05:48
0m

September 22 14:30 UTC Released

USECRI Weekly Annualized*

Actual

0.0 %

Forecast

Previous

0.3 %

September 22 14:30 UTC Released

USECRI Weekly Index*

Actual

143.4 %

Forecast

Previous

143.3 %

September 25 00:30 UTC 10591059m

JPNikkei Mfg PMI

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Forecast

Previous

52.2 bln $

September 25 08:00 UTC 15091509m

DEIfo Business Climate*

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Forecast

116.0 %

Previous

115.9 %

September 25 08:00 UTC 15091509m

DEIfo Current Conditions*

Actual

Forecast

124.8 %

Previous

124.6 %

September 25 08:00 UTC 15091509m

DEIfo Expectations*

Actual

Forecast

107.9 %

Previous

107.9 %

September 25 11:30 UTC 17191719m

TRCapacity Utilisation*

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Forecast

Previous

78.8 %

September 25 11:30 UTC 17191719m

TRManufacturing Confidence*

Actual

Forecast

Previous

110.7 %

September 25 12:30 UTC 17791779m

USNational Activity Index*

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Forecast

Previous

-0.01 %

September 25 13:00 UTC 18091809m

MXIGAE Econ Activity YY

Actual

Forecast

Previous

2.4 %

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