Nomura: Bank of Canada on Hold for Rest of 2016
- Written by: Gary Howes
Content provided by eFXNews.
Nomura on the Bank of Canada in the wake of recent inflation data:
Canada’s headline came in at 1.3%, while core CPI inflation increased to 2.1%.
Inflation excluding food and energy remained unchanged at 1.7%.
Overall, the report shows that inflationary pressures increased slightly in March mainly as a result of continued pass-through from the weaker CAD.
However, broader inflationary pressures remain subdued as evidenced by inflation excluding food and energy.
We continue to believe inflation is not the main source of concern for the Bank of Canada (BoC) currently, as the Bank continues to view that a significant amount of excess supply will counterbalance upside pressures from the weaker currency.
We continue to believe the BoC will keep its policy rate on hold this year.