Bank of Canada: No change on Wednesday, to hike during Q3 - Wells Fargo

Analysts at Wells Fargo, see the Bank of Canada keeping the interest rate at 1.25% on Wednesday. They see a hike during the third quarter.

Key Quotes:

“After hiking rates in January, the BoC subsequently remained on hold in March and April and we, and most other analysts, expect that the BoC will keep policy unchanged again on Wednesday. Policymakers did not express any particular urgency to raise rates in the statement they released after the last policy meeting in April, although they did seem to indicate that further tightening will be appropriate later. Indeed, we look for the BoC to raise rates again in the third quarter.”

“Canada will release GDP data for the first quarter on Thursday. Real GDP rose at an annualized rate of 1.7 percent in Q4-2017, and we project that the economy grew at a roughly similar rate in Q1. Rates remain low in a historical context, and we believe that the BoC will eventually need to tighten further to return rates to a more “neutral” (i.e., neither stimulating nor restraining the economy) setting.”