BoC expected to cut interest rates back to a record-low 0.25% – BMO CM

FXStreet (Delhi) – Benjamin Reitzes, Senior Economist at BMO Capital Markets, suggests that the Bank of Canada is expected to cut interest rates back to a record-low 0.25% at the today’s meeting.

Key Quotes

“The Monetary Policy Report is expected to be cautious with near-term GDP forecasts cut amid the latest slide in commodity prices. For an in-depth look at the Bank of Canada policy announcement, see this week’s Feature.

Retail sales look to climb 0.2% in November, consistent with the soft underlying trend in the economy. The risks to our forecast are balanced, with a potential boost from Black Friday sales providing upside, while the downside risk comes from broader lacklustre economic activity.

Consumer prices likely fell 0.3% in December, the third decline in the past four months. December is a seasonally weak month for the CPI (the weakest of the year in fact), and our call is actually a positive on a seasonally adjusted basis. Gasoline prices fell once again, but this December’s 2%-to-3% drop pales in comparison to the prior year’s near-10% plunge.”

Benjamin Reitzes, Senior Economist at BMO Capital Markets, suggests that the Bank of Canada is expected to cut interest rates back to a record-low 0.25% at the today’s meeting.

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