Hawkish Leaning Headlines To BoC Minutes Don't Trigger CAD Reaction

Some hawkish leaning comments from the BoC minutes, especially on the main Bloomberg headlines, have had little impact on CAD assets. 2Y GoC yields trade just 0.2bp higher vs shortly before and USDCAD continues to hold close to its session high of 1.3815.

• Some of the highlights:
• *BOC AGREED TO BE PATIENT AND HOLD 5% RATE, REVISIT HIKING LATER - bbg
• *STICKINESS OF CORE INFLATION A 'CONSIDERABLE CONCERN', *BOC DISCUSSED WHETHER INFLATION MAY BE BECOMING ENTRENCHED - bbg
• *BOC DISCUSSED POSSIBILITY NEUTRAL RATE MAY BE DRIFTING HIGHER – bbg
• *GOVERNMENT SPENDING MAY OBSTRUCT REACHING INFLATION TARGET – bbg
• There’s a split amongst members of the Governing Council on the need for higher rates. As our policy team notes: "Some members felt that it was more likely than not that the policy rate would need to increase further to return inflation to target"... "Others viewed the most likely scenario as one where a 5% policy rate would be sufficient to get inflation back to the 2% target, provided it was maintained at that level for long enough." The Governing Council that sets borrowing costs has six members.