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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CANADA
- With analysts unanimously expecting a 25bp hike on March 2 in yesterday’s BBG survey and the market pricing in 33bps, it will take a very large miss in either direction to materially change this.
- Macklem has been clear that January’s hold was a significant step in the path to tightening policy and will continue this path in a number of steps.
- He has also been clear that the BOC won’t be on auto-pilot in hiking rates and it’s here that the composition of the upcoming inflation reports is important with more than 6 hikes priced for 2022.
- Shelter inflation surged in December from 4.8% to 5.4% Y/Y and could have seen further strength in Jan judging by existing home prices hitting a record 28% Y/Y.
- For now, long-term inflation expectations remain relatively well anchored, although 5Y breakeven rates have drifted 20bp higher than when the BOC prepared its Jan MPR.
- After CPI, the main two releases to come before the March 2 meeting are retail sales for Dec (Feb 18) and GDP for Dec/Q4 (Mar 1).
BOC CSCE for inflation 2Y out (yellow) and 5Y out (green), 5Y breakeven (white) and BOC target (purple)Source: Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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