Bank of Canada still sitting on fence

The policy statement from the Bank of Canada this morning is unequivocally dovish, no doubt a bit of a disappointment to market analysts, who had expected a more hawkish tone. Indeed, despite more positive data at home and abroad and more US policy stimulus supporting US growth this year, the bank did not materially change its outlook for economic growth and inflation. We think this is the right decision, and it supports our view that the bank will refrain from raising its policy rate this year.