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CANADA: Analysts Broadly Split Between 25bp or 50bp Cut In Dec

CANADA
Bank of CanadaGlobalCentral Bank NewsCanadaBulletMarketsFixed Income BulletsForeign Exchange BulletsRegionNorth America
  • The broad collection of communications from the BoC yesterday made it clear that it remains data dependent.
  • The market still attributes sizeable odds of a second 50bp cut in December though, currently seen as a broadly 50/50 call between a 25bp or 50bp cut. This likely embodies a view shared by TD Securities, that it only made sense to cut 50bp this week if the BoC is in a rush towards more neutral policy setting.
  • Our review of analysts sees a similar finding, with a rough split between 25bp and 50bp cut calls.
  • Analyst terminal rate expectations are all at the bottom of the BoC’s neutral range of 2.25-3.25%, mostly between 2.25-2.5% but RBC stand out with their 2.00% forecast. 

 

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  • The broad collection of communications from the BoC yesterday made it clear that it remains data dependent.
  • The market still attributes sizeable odds of a second 50bp cut in December though, currently seen as a broadly 50/50 call between a 25bp or 50bp cut. This likely embodies a view shared by TD Securities, that it only made sense to cut 50bp this week if the BoC is in a rush towards more neutral policy setting.
  • Our review of analysts sees a similar finding, with a rough split between 25bp and 50bp cut calls.
  • Analyst terminal rate expectations are all at the bottom of the BoC’s neutral range of 2.25-3.25%, mostly between 2.25-2.5% but RBC stand out with their 2.00% forecast.