Uncertainty around the global economic outlook has increased in the weeks since the Bank released its October Monetary Policy Report (MPR). Conditions in global financial markets have deteriorated as the sovereign debt crisis in Europe has deepened. Additional measures will be required to contain the European crisis. The recession in Europe is now expected to be more pronounced than the Bank had anticipated in October, as a result of increased deleveraging and tighter financial conditions, as well as necessary fiscal austerity and structural reforms.(Bank of Canada)
Other topics; Canadian GDP growth for Q3 and Q4 are expected to be higher than the BoC had expected in October, also although inflcation is also at the upper range of the BoC's target (both Core and non-core) CPI are expected to fall before the end of the year.
Canadian futures market still takes the view that Canadian rates could go down Q2/12 by 25 bps -- depending on how serious things get in Europe and America (lest we forget China's own slowdown). Things are getting interesting.
The CAD remains int he 98/1.02 range -- one (me) would expect the CAD to fall as economic stress builds up (watch Europe on the 9th of December) and America is getting close to its borrowing cap (again), so things there could further deteriorate.