The Bank of Canada Preview: Lower oil prices and headline inflation will keep rates on hold in January
- The Bank of Canada is widely expected to keep its target for the overnight rate at 1.75% in January as oil prices slump weighs on headline inflation and CAD trades lower.
- Oil prices fell 38% since the beginning of October until the end of 2018 weighing on headline inflation globally.
- Trade conflicts are weighing more heavily on global demand.
Four reasons why the Bank of Canada will keep hiking in 2019
We expect Canada’s central bank to take a pause in December, but decent growth, low unemployment and inflation at the bank’s target level should keep policymakers on track for two – if not three – rate hikes next year. Read more @ https://think.ing.com/articles/four-reasons-why-the-bank-of-canada-will-keep-hiking-in-2019/
The following will be important news for Canada tonight. Why traders care?
- BOC Monetary Policy – It provides valuable insight into the bank’s view of economic conditions and inflation – the key factors that will shape the future of monetary policy and influence their interest rate decisions;
- BOC Rate Statement – It’s the primary tool the BOC uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions;
- Overnight Rate – Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future;
- CAD BOC Conference – It’s among the primary method the BOC uses to communicate with investors regarding monetary policy. It covers in detail the factors that affected the most recent interest rate decision, such as the overall economic outlook and inflation. Most importantly, it provides clues regarding future monetary policy;
Whats our view? We expect no change for the CAD overnight rate.
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