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/BOC policy previews: - Scotiabank: 25Bp.....>

CANADA
CANADA: /BOC policy previews:
- Scotiabank: 25Bp hike to 1.75%
- However, "communication risk is elevated as Gov. Poloz will need to balance
positive developments on trade (NAFTA/USMCA) and sentiment (Business Outlook
Survey) against weaker global growth prospects and record (CAD-bearish) oil
price differentials. If the 'gradual approach' language is retained, tightening
expectations for 2019 may moderate."
- "Trade policy developments should ... allow the BoC to remove some of the
negative forecast judgements incorporated into the July MPR."
- CIBC: 25Bp hike to 1.75%, additional 25bps hike to 2.0% in January
CIBC strikes a more cautious approach to a hike from the BoC Wednesday. "While
we agree that less trade uncertainty is unequivocally good for the economy, it
is not entirely clear - given the information we have in hand today - that is
requires the BoC to go 'that' much more." Markets are "currently looking for a
2.5% policy rate by late 2019, which we think is too high given currency
considerations and the considerable starting point for household leverage."

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