07:55 AM EDT, 06/19/2024 (MT Newswires) -- U.S. markets are closed Wednesday for the Juneteenth holiday, which should make for a "pretty tame" day in Canada, said BMO Economics in its morning note.

Canada government bond yields were opening flat-to-slightly higher, following the move in global bonds, BMO said. Canada's 10-year yield was up 1 bp to 3.27%, the lowest since February. The US$ index was a bit softer with the greenback mixed against the major currencies. The loonie was a bit firmer at around C$1.371. Commodity prices were mixed as well, with WTI above US$81, and gold flat close to US$2330.

There are a couple of releases in Canada today, beginning at 8:30am with household credit figures for April. According to BMO, credit growth has troughed overall, but mortgage credit growth continued to slow into Q1. It noted while the Bank of Canada cut in June, there's no reason to believe that borrowers were keen on borrowing ahead of the expected pullback in rates, so it is looking for the figures to remain sluggish.

Next up at 1:30pm, the Summary of Deliberations from the BoC's June 5 policy meeting will be released with BMO expecting a dovish tone. Governor Macklem noted that continued inflation progress would likely provide room for further policy easing, opening the door to potentially back-to-back rate cuts. BMO will be looking for any further colour on Macklem's comments that Canada is not close to the limits of policy divergence with the Fed, and a broader lack of concern about the outlook for the Canadian dollar. "With the rate-cutting cycle now underway, it's about how far and how fast. The market will be looking for any clues on that front," BMO added.

Yesterday, BMO noted, Statcan released updated weights for the CPI basket. As expected, services sectors saw a modest uptick in weight, consistent with shifting spending patterns. BMO said while the changes could make inflation "a touch stickier", any impact will be minor and doesn't change the bigger picture for the BoC. Indeed, BMO's early estimate for May CPI (which looks to be on either side of +0.3% m/m) barely moved when the new weights were applied. BMO said it will have a full preview of May CPI in Focus this Friday.