BoC took out insurance in Jan; may wait now, then cut again

The Bank of Canada's (BoC's) rate decision will be on 4 March (10:00 ET).

The BoC unexpectedly cut its overnight lending rate (-25bps to 0.75%) in January, which it justified as "insurance" against the oil-price shock, a mostly negative development for Canada's economy. 

Oil prices have stabilised somewhat since then, and the latest speech by Governor Poloz was slightly hawkish. Standard Chartered Research notes:

• We expect the BoC to stay on hold, although this remains a close call. If so, the statement is likely to be dovish. 
• Money markets are pricing in c.8bps of a cut; only 5 analysts out of 22 polled by Bloomberg expect a 25bps cut. 
• We think the next rate cut will be driven by data deterioration, which will likely be more obvious in coming weeks. 
• A weak Q4 GDP print on 3 March poses the risk that the BoC may decide not to wait to ease policy.