Tonight we get the BoC policy decision and MPR. The policy rate should be left unchanged at 0.75%, as widelyexpected (14/14 economists as per Bloomberg, and only ~2bps priced in), which should leave the focus on forecasts in the MPR. A downward revision to near-term projections is likely, and the bigger question is whether that will be offset by higher projections further in the forecast. “With stable oil and a lower currency relative to the last MPR estimates, we think that should be the case, leaving an overall unchanged bias from the Bank for the output gap to close ‘within about two years’, but with some caution around oil still-an essentially soft dovish tone”, Says RBC Capital MarketsAhead of the BoC will be the manufacturing sales release, where RBC is decently below consensus in calling for a continued decline in February (RBC: -0.3% m/m, cons: +0.3%) largely on the back of weakness in the auto sector.
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