James Knightley, Chief International Economist at ING, points out that it’s not expected the Bank of Canada to follow the Fed with rate cuts just yet.
Key quotes
“The labour market’s stronger than expected, inflation’s broadly on target and rates are already lower than in the US. And that will add to further CAD momentum.”
“Today, the implied probabilities are virtually zero for next week and just 10% for December. That’s a big change.”
“On balance, we do not expect any major shifts in fiscal policy. In terms of the economic numbers, the labour market is proving to be more resilient than we had thought. After a subdued May-July period the economy created 81,100 jobs in August with a further 53,700 added to payrolls in September.”
“The BoC did not raise interest rates as aggressively as the Federal Reserve in the past couple of years with Canadian policy still broadly viewed as mildly accommodative.”
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