Bank of Canada Takes The Stage Today

Bank of Canada governor Stephen Poloz will release the bank's Quarterly Monetary Policy Report at 10am today.

• It is widely anticipated that he will cut Canada's 2015 GDP growth forecast to 2.0% (from 2.4%)
• While it is also widely anticipated that he will leave the Bank Rate at 1%, it is thought that he may pave the way to a cut in the Bank Rate down the road.
• and hence, the rationale for yesterdays $C tumble:

• Last week, BOC deputy governor Timothy Lane spoke about the impact of lower oil prices on the Canadian economy (blog of Jan,14: "Oil and Canada") and stated that the repercussions would be a net negative.
• However, there is more at play than just oil prices:
• Copper, a "bellweather" for the direction of the global economy continues its slide as well:

• currently at prices not see since 2009.
• Deflationary pressures are strong across the commodity indexes.
• Certainly the BOC is monitoring this as well, given that Canada is a major exporter of commodities.

The upside of a weaker C$: Canadian things are cheaper for those who desire to purchase them.

• Next on Center Stage: Tomorrow the European Central Bank:
• Will they live up to market expectations or will they disappoint? 
• stay tuned...........and hold on!