The Bank of Canada will hold its monetary policy meeting on Tuesday, and economists are mixed over whether the central bank will cut rates or introduce quantitative easing measures. However, most agree forecasts for economic growth will be downgraded.

"Expect Governor Carney and his team to say, in effect, 'never mind' about what they said about a brisk economic rebound in 2010," CIBC economist Avery Shenfeld said.

As for the target rate, Shenfeld's expectation is in line with the consensus forecast, which is for no change to the 0.50% target rate.

Nevertheless, economists at Scotiabank said there is a real possibility the bank could cut its target rate and announce the purchases of asset-backed securities, commercial paper, or Canadian Government bonds.

They said any interest rate cut or quantitative easing (QE) measures will weaken the Canadian dollar.

However, Bank of Canada Governor Mark Carney has recently downplayed any notion that the central bank will introduce QE at the meeting, saying that the central bank will rather publish a framework for quantitative easing measures to be used at a later date, if necessary.

In the U.S., Treasury Secretary Timothy Geithner will testify before the Congressional Oversight Panel of the Troubled Asset Relief Program (TARP).

Speaking last week, Geithner said the U.S. government has received $2.5 billion in dividends from banks taking part in the TARP.

All times in EDT.

8:30 CA Wholesale Sales (M/M) February Exp: +1.0% Prior: -4.2%

9:00 CA Bank of Canada Rate Exp: 0.50% Prior: 0.50%

9:30 US Fed's Hoenig Testifies Before Joint Economic Committee

10:00 US Tsy's Geithner to Testify Before Oversight Panel

13:00 US Treasury to Sell $20 billion 4-Week Bills

17:00 US ABC Consumer Confidence W/E April 19 Exp: -50 Prior: -51

By Megan Ainscow and edited by Sarah Sussman
©CEP News Ltd. 2009