STIR: Commerzbank Think Dovish Plays In EUR Short End Offer Cheap Option

• EUR/USD: $1.1600-05(E1.3bln), $1.1625(E668mln), $1.1650(E949mln), $1.1700(E558mln)
• USD/JPY: Y150.00($878mln), Y153.00($785mln)
• EUR/GBP: Gbp0.8750(E429mln)
• AUD/USD: $0.6515(A$865mln)
• USD/CAD: C$1.3675($1.1bln), C$1.3965($1.0bln), C$1.4015($1.7bln)

MNI's Greg Quinn asks about how the BOC currently views the Canadian dollar's role as an economic shock absorber:

• Deputy Gov Rogers responds: "We don't target the Canadian dollar. We put a number in as part of our forecast. I mean, in the type of shock we're dealing with, a trade shock, the Canadian dollar is a key factor. It's a key input to how we think about what's going on in the economy. It's still playing its shock absorber role. I mean, the things that are moving the Canadian dollar are the same things that always do. So there's the price of oil, there's expectations around monetary policy, and then there's just sort of the sentiment around global risk. Some of those correlations have been a bit less tight than they've been historically, but basically, the Canadian dollar is behaving the way it usually does, in the way it's meant to, inside of our monetary policy framework. So not much more to say than that."

Asked what constitutes a "material change" in the outlook that would warrant a BOC policy response, Macklem says that one of the advantages in returning to a base-case outlook in the MPR is that they can assess incoming data relative to that outlook and adjust policy accordingly if necessary.

• "What do I mean by material? You know, it's not one month of data that shows some shift you need to see. You need to see some accumulation of evidence that you're coming in below that forecast, or above that forecast, enough that it actually changes your outlook of the future. If something comes up a little above, but we think it's just going to come back roughly to the forecast, that's not a material change. But if the outlook really changes, yes, you know, we're certainly prepared to respond. I hope our message is fairly clear today that, with this cut and based on this outlook, we think the current policy rate is about right. But you know, we recognize there's a lot of uncertainty out there."

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