BoC Pricing Firms To Fully Capture Hike, Lack Of Guidance Blunts Impact

The BoC’s tones on inflation, pushing back of the timeline whereby it expects CPI to return to target and language on excess demand leave the BOC-dated OIS strip running 5-10bp firmer than levels that were showing into the decision (+6bp represents adjustments to reflect the difference between pre-market pricing and the hike delivered at the end of today’s meeting), with circa 20bp of tightening now showing for the Bank’s September meeting. Questions surrounding the lack of guidance from the Bank on future rate moves will likely be a focal point when it comes to the post-meeting press conference given by Governor Macklem and Senior Deputy Governor Rogers, with the omission of previous language on that front limiting post meeting pay-side.