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MNI STATE OF PLAY: BOC Seen Hiking 75BPS To Grow Fed Gap

(MNI) OTTAWA
OTTAWA (MNI)

Economy showing resilience against slowdown relative to G7 peers and China.

Canada will deliver another hefty rate increase Wednesday to further widen the gap over G7 peers, with most economists seeing three-quarters of a point as domestic demand stays resilient against stalling global growth.

The 2.5% overnight rate is seen rising to 3.25% by 15 economists surveyed by MNI with another five saying it will climb to just 3%. Either move would be less than the "front-load" July 13 hike of 100bps, with a few economists and former advisers saying a repeat of that move cannot be ruled out. Futures markets have fully priced in a 75bp increase.

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Canada will deliver another hefty rate increase Wednesday to further widen the gap over G7 peers, with most economists seeing three-quarters of a point as domestic demand stays resilient against stalling global growth.

The 2.5% overnight rate is seen rising to 3.25% by 15 economists surveyed by MNI with another five saying it will climb to just 3%. Either move would be less than the "front-load" July 13 hike of 100bps, with a few economists and former advisers saying a repeat of that move cannot be ruled out. Futures markets have fully priced in a 75bp increase.

Keep reading...Show less