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Are you ready for the only major monetary policy statement scheduled this week?

Tomorrow at 2:00 pm GMT the Bank of Canada (BOC) will publish its monetary policy decisions for the month of April.

Here are tips and tricks on how you can make pips from the central bank event:

What did the BOC say last month?

As expected, the BOC kept its overnight rate at 0.50%, its bank rate at 0.75%, and the deposit rate at 0.25%.

The central bank didn’t conduct any post-announcement presser, so its messages were confined to its official statement. Let me summarize its points:

Upward inflation pressure is temporary
The BOC nodded to the 2.1% inflation reading in January, which the central bank said reflected the “temporary” effects of higher energy prices and carbon pricing changes. According to the statement, the BOC’s inflation measures still point to “material excess capacity.”

Employment schloyment
Even though Canada had seen back-to-back monthly gains in full-time employment, the central bank shrugged off the improvements and stressed that subdued growth in wages and working hours are still contributing to economic slack.

Exports still face “challenges”
Completing the positive-negative approach are the BOC’s notes on the economy. Turns out, the latest consumption and housing data are pointing to economic growth that’s stronger than what the BOC expected in January.

However, the central bank was quick to say that “exports continue to face the ongoing competitiveness challenges described in the January MPR.

ICYMI, those include Trump’s tax and fiscal policy proposals as well as the upward pressure of higher U.S. bond yields to Canada’s own bond yields.

How did the Loonie react?

As you can tell, Poloz and his team basically downplayed every positive thing they said about the economy. This led market players to believe that BOC members are maintaining their dovish stance in case they need to cut rates.

CAD's 1-Hour Forex Charts
CAD’s 1-Hour Forex Charts

The Loonie shot up across the board when the BOC refrained from making policy changes, but it soon turned lower after traders digested the central bank’s dovish theme.

What are market players expecting this time?

The BOC is expected to hold its overnight rate at 0.50% for another month in April. That doesn’t mean that we won’t see any action though!

Remember that the BOC had three main concerns in its last statement: inflation, employment, and trade.

In Canada’s economic snapshot, we pointed out that lower gasoline prices mostly dragged the headline CPI in February, while the annualized figure was pulled down by cheaper food prices. Well, guess what? The BOC already called these trends in its January MPR.

Employment trends are also sort of affirming the BOC’s concerns. See, while full-time jobs increased in March, the number of unemployed also rose for the month, which means that the economy isn’t efficiently absorbing the new entrants to the labor market.

In addition to that, recent business outlook surveys also suggest that businesses aren’t expecting higher prices and wages anytime soon. These support the BOC’s concerns that the sector is still showing slack.

And then there are Canada’s trade numbers, which clocked in a first deficit after three months of surpluses in February. What’s more, the drop in exports was partial because of lower oil prices and weaker exports to the U.S. Yipes! I can almost hear the BOC say “We told you so!”

Overall, it looks like the stars are lining up to support the reasons for the BOC’s dovishness. But with oil prices falling and Trump’s tax and fiscal plans kind of up in the air at the moment, there’s also room for the BOC to tone down their dovish remarks.