Nomura said it expects the Bank of Canada to leave the policy rate unchanged at Wednesday's policy meeting.
The BoC is slated to release its policy decision at 9:45 a.m. ET on Wednesday.
Governor Tiff Macklem is unlikely to provide directional guidance and is likely to stress two-sided risks, noted Nomura.
The BoC will also publish the Monetary Policy Report (MPR) on Wednesday, with revised economic projections.
The bank expects a "modest" upward revision to the inflation forecast in the MPR, reflecting higher energy prices. The BoC could "modestly" lower its near-term growth profile amid soft Q1 activity and the Iran war, but the medium-term outlook is unlikely to change materially.
That said, considering the elevated uncertainty, the BoC could opt for a scenario analysis rather than a single baseline, stated Nomura.
Overall, the bank estimates the BoC to remain in a wait-and-see mode and keep rates unchanged through 2026, with risks "modestly" skewed to a hike.