09:36 AM EDT, 07/22/2024 (MT Newswires) -- In Canada, National Bank noted in a Friday note, the central bank is set to lower the target for the overnight rate by 25 basis points on Wednesday.

National said empirical analysis of past Bank of Canada interest rate cycles lend support to the BoC starting off with back-to-back cuts and, it added, worries about a recent pick-up in core inflation should be assuaged by a steadily softening labour market. National noted the unemployment rate is up 0.3%-pts in the country since the last decision and is "on track" to reach near 7% by the end of the year regardless of the near-term policy path. It noted wage growth still appears to be "running hot", but also noted the Bank has recently adopted a more permissive stance, drawing attention to measures that have eased more. Fortunately, National said, the recent Business Outlook Survey will have offered them good news on this front. It added the BOS also showed further moderating inflation expectations, an item the BoC has been "keying on".

In the post-decision press conference, the media's focus will remain squarely on the outlook for

additional easing, National said. It expects Governor Macklem to stress data dependence and

acknowledge lingering inflation risks ("which argues for graduality") but still indicate that it's "reasonable" to expect further cuts.

National wll also keep an eye on the publication of the CFIB Business Barometer for the month of July and on May's iteration of the Survey of Employment, Payrolls, and Hours (SEPH).