Preview - Bank of Canada monetary policy meeting Wednesday 27 October 2021

Author: Eamonn Sheridan | Category: Central Banks

Earlier preview is here: the decision is Wednesday and it will include a taper but could also include a more hawkish message or a pushback against a market pricing in four hikes next year.

This via TD on what they expect:

  • We expect the BoC to argue that inflation is largely transitory, and to maintain its current forward guidance for the overnight rate. 
  • We also look for the BoC to announce that its QE program will transition to the reinvestment phase in November.
  • We like USDCAD higher into the BoC. While the stagflation theme has oddly benefited CAD, it's likely moved too far, too fast. CAD is trading at a 1-sigma premium on our dashboard and is the most overbought currency in the G10. We look for better selling levels ahead of the 1.2850 pivot point

The action from the BoC kicks off at 10000 US ET (1400 GMT) with the release of the statement and the policy report (will include fresh forecasts). Governor Macklem follows up with his news conference an hour later. 

Earlier preview is here: the decision is Wednesday and it will include a taper but could also include a more hawkish message or a pushback against a market pricing in four hikes next year.
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