Andrew Kelvin, Senior Canada Rates Strategist at TD Securities, suggests that the BoC will enter its blackout period next week, so Governor Poloz’s appearance in Jackson Hole this weekend will be his last opportunity to shape the narrative ahead of the September interest rate announcement.
Key Quotes
“While the Bank of Canada eschews explicit forward guidance, they have shown a willingness to send markets more direct hints during the current tightening cycle. The topic of the panel has been announced as “The Fourth Industrial Revolution and Central Banking” which doesn’t seem well suited to a discussion of near-term monetary policy – but if the Governor believes markets are under-pricing the September meeting he should have enough leeway to deliver that message.”
“To be clear, we still believe that it makes more sense for the BoC to wait until October given the current economic backdrop. But with the October meeting almost fully priced, risk/reward supports positioning for higher rates in the very short-end of the curve heading into the weekend.”
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