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In case you were too busy placing office bets on the NBA Finals, then you should know that the Bank of Canada (BOC) is printing its monetary policy decision tomorrow at 3:00 pm GMT.

Planning on trading the event? Here are points you need to know:

What happened last time?

As expected, the BOC kept its interest rates steady for another month in April. That is, the overnight rate remains at 1.75%, the Bank Rate is still 2.00%, and the deposit rate is 1.50%.

What market players DIDN’T expect was that the central bank would drop hints of future rate hikes and go #TeamDovish in its statement.

Aside from removing comments relating to “the timing of future rate increases,” BOC also downgraded its 2019 growth forecasts.

And as if the point wasn’t clear enough, Governor Poloz and his team emphasized their dovishness by sharing that “an accommodative policy interest rate continues to be warranted” and that they would add any “new negative disturbance” as “fodder for whether interest rates need to be revised down.

CAD 15-Minute Forex Chart
CAD 15-Minute Forex Chart

The Loonie lost pips across the board at the BOC’s jump to the dovish camp, but soon found support when Poloz started talking rates more likely going up than down if their (optimistic) forecasts prove to be right.

What are traders expecting this time?

While Poloz will conduct a presser after the event, the BOC isn’t printing any economic forecasts this week.

So, after last month’s shift to a dovish bias, analysts are expecting the central bank to take a chill pill and maintain status quo this time around.

On one hand, the latest retail sales and labour market numbers point to improved economic conditions since the BOC’s last meeting.

On the other hand, escalation of trade-related hostilities between the U.S. and China – Canada’s biggest trading partners – should keep central bankers from being too optimistic.

Does this mean that you should stay away from the event?

HECK NO!

Since the BOC’s statement is the only top-tier report during the U.S. session, the Loonie could see increased volatility from even small changes in the BOC’s statement and Poloz’ presser.

Market geeks think it likely that Poloz and friends will balance their dovish statements with hints of rate hikes if future economic releases point to the recent slowdown being “detour” to a stronger economy in H2 2019.

If they express concern over U.S.-China trade developments, or if they make light of the impact of last month’s strong jobs numbers on consumer prices, then we could see the Loonie trade lower against its counterparts.

But if they repeat their optimistic forecasts for the later part of the year, or if they maintain that current economic weaknesses might be temporary, then the comdoll could gain pips across the board.