08:06 AM EDT, 07/30/2025 (MT Newswires) -- The Bank of Canada offers a full suite of communications on Wednesday as the policy statement appears at 9:45 a.m. ET along with the July Monetary Policy Report, noted Scotiabank.

Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers deliver their press conference 45 minutes later which will last for up to about an hour.

Key for the BoC will be whether it has any confidence to tiptoe back toward the forecasting business and as such implied guidance of some form or stick to scenarios with an ongoing lack of confidence on core issues like the evolution of trade and fiscal policies. The bank thinks the latter is more likely.

The statement is likely to repeat the following paragraph that outlines the four things the BoC is focusing upon and its interpretation of how these matters are tracking is likely to remain cautious:

"Governing Council is proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases are passed on to consumer prices; and how inflation expectations evolve."

-- On the first (whether higher tariffs have reduced demand for Canadian exports), the jury is somewhat out so far, according to Scotiabank. Export volumes are tracking a large 33% quarter-over-quarter seasonally adjusted annual rate (SAAR) drop in Q2 after gains of about 10% in each of Q4 2024 and Q1 2025. It's entirely plausible that exports will suffer, but the pulled forward tariff-avoiding behavior and the ensuing payback require more data in a cleaner period in order to assess the pattern.

--On the second, it's certainly not spilling over negatively into employment, especially given the blowout June reading. Household spending measured by the higher frequency retail sales report is tracking a volume gain of over 2% quarter-over-quarter SAAR, which isn't fantastic but is hardly collapsing and excludes services that are probably performing better. Investment measured by capital goods imports that dominate investment spending was up by 29% quarter-over-quarter SAAR in Q1 and is tracking a similar decline in Q2 on pulled-forward effects. More data is needed here too, to be comfortable with the trend as opposed to the distorted tariff-avoidance effects.

-- On the third that flags the speed and magnitude of cost increases being passed on to consumer prices, Ithe bank thinks the BoC will remain concerned about the trend in core inflation readings. Disaggregating the influences upon prices is difficult, but the BoC has been faced with sticky, high core inflation readings on a month-over-month SAAR basis for a year-and-a-half despite the emergence of a negative output gap 8-10 quarters ago -- depending upon the measure that is used.

-- On the fourth, the evidence is mixed and the data is "woefully stale." The BoC's surveys showed some improvement in business expectations of future inflation, but no improvement among consumers.