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Some Marginally More Hawkish Snippets From Rogers Remarks

  • Slightly stronger language on inflation expectations ("damaging cycle would be set in motion" if elevated inflation becomes entrenched) and reiterates upside risk to consumer spending from households accumulated extra savings from the pandemic (as opposed to waiting for fresh forecasts with the MPR on Oct 26).
  • Elsewhere, remarks that inflationary pressures broadening and needing a period of lower growth to bring demand back in line with supply as per previous commentary.
  • Note particular focus on the next round of BOS/CSCE results due Oct 17 (before Oct 26 BOC): “survey results will help us see if the short-term inflation expectations of consumers and firms are coming back down. This will be an important sign that monetary policy is working and that Canadians are beginning to feel some relief.”
  • Still, with media Q&A still to come, relatively limited impact on front-end GoCs after an already sizeable sell-off earlier in the day following the ECB/Powell (2YY +2.5bp on the day after +6bp intraday rise) whilst USDCAD holding near session lows.

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