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Analyst BoC Views Post Labour Report

CANADA
  • BMO: Consistent with a less aggressive nature than the mega 100bp move in July, looking for a 50bp hike in Sept.
  • CIBC: The labour report muddied the waters but the BoC will likely focus on the historic low u/e rate and still strong wage growth to justify another non-standard rate hike next month.
  • Desjardins: We think inflation may have peaked and the economy is historically sensitive to interest rate increases but we believe the BoC will put more weight on the extremely tight labour market and hike 50bps in Sept.
  • GS: Still expect a 75bp hike in Sept and look for a 4¼% terminal rate reached in Jan because inflation is broad-based and we expect it to remain elevated this year.
  • JPM: Still see a 50bp hike in Sept and expect an above-neutral 3.25% by year-end 2022.
  • TD: Still expect a 75bp hike in Sept but bar is a little higher. USDCAD has more confidently formed a 1.28/29 base – we think it appropriate to leg into shorts into or around the BOC meeting.
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  • BMO: Consistent with a less aggressive nature than the mega 100bp move in July, looking for a 50bp hike in Sept.
  • CIBC: The labour report muddied the waters but the BoC will likely focus on the historic low u/e rate and still strong wage growth to justify another non-standard rate hike next month.
  • Desjardins: We think inflation may have peaked and the economy is historically sensitive to interest rate increases but we believe the BoC will put more weight on the extremely tight labour market and hike 50bps in Sept.
  • GS: Still expect a 75bp hike in Sept and look for a 4¼% terminal rate reached in Jan because inflation is broad-based and we expect it to remain elevated this year.
  • JPM: Still see a 50bp hike in Sept and expect an above-neutral 3.25% by year-end 2022.
  • TD: Still expect a 75bp hike in Sept but bar is a little higher. USDCAD has more confidently formed a 1.28/29 base – we think it appropriate to leg into shorts into or around the BOC meeting.