OTTAWA — Canadians will hear from the Bank of Canada on Wednesday for the first time in eight weeks — which is a long time given the brisk movements of global economic conditions.
Governor Stephen Poloz is widely expected to hold the overnight interest rate at 1.75 per cent as the bank delivers its first policy announcement — or public commentary of any kind — since early July.
Many market analysts are expecting a shift in tone from the Bank of Canada that will crack open the door to a possible rate cut — or rate cuts — in the final months of 2019.
Simon Harvey of Monex Canada says the country’s economy has bounced back after a slowdown at the start the year — but he adds there have been concerning signs like slowing domestic demand and, more notably, further escalation of the U.S.-China trade war.
The bank warned in July how widening global trade conflicts were posing a threat to Canada’s stronger-than-expected rebound — and Harvey says the environment has deteriorated further over the summer.
A research note from TD Economics says it expects the Bank of Canada to acknowledge the growing headwinds and be open to lowering rates in October, which would give governing council more time to monitor political developments and gauge business sentiment.