Analysts at TD Securities are expecting the Bank of Canada (BoC) to cut rates by 50bps over 2020, with 25bp cuts in January and April.

• “While the Canadian economy has thus far been resilient to global headwinds, we do not believe recent actions taken by the US and China to enough to meaningfully resolve the elevated level of trade uncertainty. This should prompt the BoC to provide more stimulus to offset the impact of global headwinds, although recent messaging suggests there is a very high bar to do so by the end of 2019.
• Underscoring the BoC's (relatively) constructive outlook is a healthy starting point; Q2 GDP was stronger than expected at 3.7%, and even with an undesirable composition (domestic demand contracted by 0.7%) the output gap is nearly closed.
• Core CPI remains target at 2.0% on average and labour market strength has shown no signs of abating, which supports the narrative that soft Q2 consumption was a one-off.”