Bank of Canada could tilt to July rate cut to benefit from flood of data
OTTAWA - The Bank of Canada may dash hopes of a June interest rate cut and instead move in July, which will give it seven more weeks of key data to confirm the recent trend of a slowing economy and continued easing of inflation, some economists said.
"From a risk management standpoint, it makes sense for the Bank of Canada to wait the extra six or seven weeks to be as certain as it can be that the inflation trend is going to continue," said Andrew Kelvin, Head of Canadian and Global Rates Strategy at TD Securities.
Even at the risk of upsetting the financial and housing markets, a wait until July could also help the BoC to not diverge too much from the U.S. Federal Reserve, risking a drop in local currency as Macklem himself admitted earlier that there was a limit to how far U.S. and Canada's rates can diverge, some said.
Apart from new sets of data, the BoC will also release its quarterly survey of business leaders and consumers on economic growth and inflation expectations on July 15, Derek Holt, Vice President and Head of Capital Markets Economics at Scotiabank, wrote in a note.
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