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Are we due a surprise from the BOC today?

The Bank of Canada monetary policy decision is today at 15.00GMT

The hand-flapping head of the Bank of Canada leads his squad in the latest monetary policy meeting today and we need to know if there are going to be any surprises.

The BOC operate a target range for their indicators and if we look at the state of play right now, they are pretty much where they want to be on all fronts.

BOC's key indicators and targets.

While that has put them firmly in neutral in the mon pol front, Tte question is whether they start to lean more to the hawkish side in the statement. Q3 GDP came in a touch stronger than they expected and Q4 could do the same. While that alone won't have them hiking anytime soon it could mean that they prepare the way for what conditions could bring a hike, for instance, if certain pressures start, or continue to build in things like wages, house prices and inflation.

Poloz seems to be a bit of a Bullard at times in that he changes his mood like the weather. At any one time he's either turning bullish or turning bearish about Canada, there's never much middle ground, although in one of his recent speeches, he said the current situation was "fuzzy".

With things looking slightly more positive than they thought in Oct, there's a risk that we see him with his happy hat on and that could reflect in his message today, to give the BOC a more hawkish slant. Expect the usual central bank mantra on downside risks etc, still, and he also recently said that they still have all the tools ready and waiting for a shock. That might have been said with one eye on the US election so a removal of that tone could be seen as hawkish.

On balance, we'll probably get a neutral announcement but for trading, the risk is that it's more hawkish than expected, which will see USDCAD fall.

It's a plain announcement this month, so no forecasts and no presser, so that's another reason why it might be a flat one.

If we do get something that sends USDCAD lower by any large amount, that might be a dip worth considering buying to run into the FOMC, although there's still the oil deal risk to consider.

We're spared a phantom puppet show this meeting

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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