Surprise CPI Slowdown Gives Borrowers Hope the Rate Pause Will Last

Every month, Bay Street economists play a game of economic bingo, and this month, they had their dabbers ready for a 4.0% inflation print. Instead, StatsCan pleasantly surprised us with 'just' 3.8%.

Almost all of Canada's economist herd is now moving in the same direction, predicting no change at the Bank of Canada's Oct. 25 rate meeting. Most forecast the next BoC move will be a cut.

Meanwhile, bond traders played their own game of Rate Hike roulette, slashing rate increase probabilities. By today's close, the #OIS# ball had landed on a 15% chance of a 25 bps hike next week.

But the bond market doesn't want us celebrating a BoC pause too wildly. The swaps market, often the party pooper, still sees a 70% chance of one more hike by next March. There are at least five party crashers convincing the market we haven't peaked on rates yet:

You don't have access to this post on at the moment, but if you upgrade your account you'll be able to see the whole thing, as well as all the other posts in the archive! Subscribing only takes a few seconds and will give you immediate access.

This post is for MLN Pro subscribers only

Subscribe now


Sign in or become a member to read and leave comments.
Just enter your email below to get a log in link.

You've successfully subscribed to
Great! Next, complete checkout for full access to
Welcome back! You've successfully signed in.
Unable to sign you in. Please try again.
Success! Your account is fully activated, you now have access to all content.
Error! Stripe checkout failed.
Success! Your billing info is updated.
Error! Billing info update failed.