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Oil plunge spurs bold call that Bank of Canada will cut rates next week

Will Bank of Canada Stephen Poloz cut rates next week?

Oil’s plunge to below $31 Monday has spurred a bold call from one financial giant that the Bank of Canada will cut rates on Jan. 20.

Things are falling apart, said Bank of America Merrill Lynch in a note to investors Monday. “Recent data suggest that economic weakness is spreading beyond energy, affecting manufacturing activity as well.”

The consensus of economists expect a hold at the January meeting, but BoA doesn’t think the central bank will wait and will cut the overnight rate by 25 basis points “in response to a struggling economy.”
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