The market is pricing in a 93% chance of a hike

Expect the unexpected.

Goldman Sachs doesn't think the Bank of Canada will raise rates this week, despite market pricing that says it's a virtual certainty. That's even after a strong jobs report on Friday.

"While certainly a close call, we expect the BoC to hike rates for the first time in October, not next week," Goldman strategist Michael Cahill told Business Insider.

"Our view is that the decidedly hawkish BoC communications were a direct response to the lack of market reaction to the incremental hawkish changes at recent meetings.

"When markets did not pick up on subtle hints, the BoC decided to be blunt. But that does not necessarily mean that a hike is days away."

My view is that a hike is coming. The last time Poloz spoke, a hike was 70% priced in and he added to it. He would have known the numbers going in and would have tried to steer them lower, not higher, if he wasn't sure about a hike.

That said, Cahill makes a good point that Canadian inflation has been low.

"The weakness in inflation data should give the BoC pause," he said. "The BoC - and governor Poloz in particular - have a reputation for being strict inflation targeters, and that should still matter now."

USD/CAD is up 20 pips today as oil weakens 0.45%.