Are investors getting ahead of themselves on the number of Bank of Canada rate hikes in 2018?
A small percentage of Canada ‘bears’ believe there’s a strong possibility that BoC Governor Stephen Poloz could surprise Wednesday (10 a.m. EDT) with a ‘dovish’ view of the economy. For sure, employment data has been strong, but the NAFTA dissolution risk has not dissipated either.
There is a possibility that tomorrow’s BoC statement could emphasizes their cautious outlook, which will only drive two-year bond yields lower and cause weakness in the recent high flying loonie (C$1.2442).
Elsewhere, the ‘mighty’ USD has strengthened a tad, rebounding from its lowest close in three years as the JPY and EUR both fell in the overnight session. Euro and Asian stocks have advanced, some to new record highs, along with government bonds, while it is a mixed picture across commodities.