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Canada: Holding On To At Least 6 Hikes In 2022

STIR
  • Ahead of Canadian housing and US PPI data, OIS is pricing 33bps for the March 2 BOC meeting, back where it was prior to US CPI.
  • There continues to be more than 6 hikes priced through 2022 after which BAX futures imply a material flattening in the path with the Z2-Z3 spread hovering in the 40-45bp range.
  • The BAX curve has shifted higher since the BOC/FOMC meeting, with at least one extra hike priced from U2 through to Z3.
  • Recall that yesterday’s Bloomberg economist survey had unanimous support for a 25bp hike in March and then widespread calls for following up in April but after that there is a greater range of views. Ultimately, most analysts surveyed expect 4-5 hikes in 2022.

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