BoC: Rate hike to 1.75% is assured - Westpac
|According to Richard Franulovich, Head of FX Strategy at Westpac, a BoC hike Oct 24 to 1.75% is assured and while that is fully discounted, the Bank will likely signal with greater conviction that yet more hikes are required and possibly at a faster pace (already hinted by the Bank).
Key Quotes
“Markets are somewhat cautious on the timing of BoC policy hikes next year, pricing in just 2 ½ hikes for all of 2019, yet the economy is operating close to full employment, inflation is on target and NAFTA cancelation risk has been all but eliminated, lifting a considerable cloud of uncertainty.”
“USD/CAD risks multi-week still skewed to lower levels though Canada’s commodity basket needs to be monitored. Canadian crude oil is trading at near-record discounts to key benchmarks while lumber prices have tumbled.”
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