Odds of a Bank of Canada hike next week tick higher after survey

Bank of Canada hike odds hit 86%

The Bank of Canada will hike rates next week or roil markets with a surprise.

The Q4 Business Outlook Survey was the last real chance for the central bank to communicate something dovish in order to counteract market expectations of a hike. Instead, the survey was littered with hawkish references including this line:

Survey results suggest that economic slack is now largely limited to the energy-producing regions."

The OIS market has reacted by ticking slightly higher to an 86% chance of a hike from about 83% before the survey.

USD/CAD has been largely unchanged at 1.2420 now compared to 1.2425 prior to the report.