Bank of Canada doubles down on growth outlook

The Bank of Canada's policy statement last week showed that it isn't willing to fold on its optimistic growth predictions, despite being dealt a bad card in the first quarter. Instead, it decided to double down, by arguing that the oil shock is almost over, clearing the way for even faster growth sooner. We expect the impact of the oil shock to be much bigger, however, while the improving non-energy fundamentals only partly buffer any economic slowdown. Eventually, we expect the Bank to cut interest rates further.