As the Bank of Canada meets this week amid trade-war chaos, a big unanswered question will loom over the gathering: Who’s right about the nation’s economic prospects, gloomy traders or optimistic policy makers? The rates market is pricing in 17 basis points of central bank easing through the next 12 months, according to trading of forward contracts. The central bank will reveal its latest policy decision Wednesday morning. Citigroup Inc.’s Canada economic surprise index, which measures data surprises relative to market expectations, is at the highest level since April 2017. The narrative “remains biased towards lackluster performance” in the currency as better Canadian data “reflects very weak expectations rather than strength in the economy.”Read more about:

Source: thestar May 27, 2019 11:26 UTC