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CIBC On the Week Ahead In Canada Economics

-- The Bank of Canada is expected to leave interest rates on hold next Wednesday and reiterate messaging that interest rate increases would only be needed if there was sufficient evidence that higher oil prices are passing through into wider inflationary pressures, Katherine Judge and Andrew Grantham write. That still seems unlikely in their book. The CIBC duo expect data later in the week [February GDP and payrolls on Thursday] will likely show the economy continuing to grow at only a modest pace that would reduce slack in the economy only very slowly.

The Federal government's fiscal update on Tuesday will likely show little change in deficit projections, with positive developments on the revenue side likely offset by already announced measures such as the fuel tax holiday and enhanced tax credits for households, Judge and Grantham say.

CIBC sees February GDP rising 0.2%, in line with consensus.

Also on the calendar for next week is the auction of $5 billion in 5-YR CANADAS on Thursday.

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