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MNI BoC Preview: Looking For New Guidance

Source: Bank of Canada

EXECUTIVE SUMMARY

  • The Bank of Canada is widely expected to hike its overnight rate 75bps to 3.25% on Wednesday with only 5 of 30 analysts calling for a 50bp hike instead, following last month’s surprise front-loaded 100bp hike.
  • Taking it above the BoC’s neutral 2-3% range, keen interest is on rate guidance and especially how strongly the Bank sees the need to increase rates ahead or whether it shifts to a more conditional stance.
  • Any ambiguity will see particularly close focus on Rogers speaking on Thursday, with a subsequent appearance by Beaudry on Sep 20 coming after US CPI and just ahead of the Sept FOMC.
  • With terminal rate expectations of circa 3.75%, there are two-sided risk with an arguable tilt to a dovish surprise.

PLEASE FIND THE FULL NOTE HERE:

BOCPreviewSep2022.pdf

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