Bank of Canada will still cut rates further

Bank of Canada Governor Stephen Poloz signalled last week that he thought the January interest rate cut was enough insurance against downside risks for the time being. That confirmed our existing view that a rate cut this week was unlikely. Nevertheless, we still think there is a chance that the Bank will cut rates in April. That will give the Bank a little more time to assess the impact on the economy from its first rate cut and also from the downturn in the oil industry.