4 Dec 2014
BoC: Rate hikes could be well into the future - BofAm
FXStreet (Bali) - According to Bank of America, BoC Gov Poloz was upbeat in an interview this morning, consistent with an on-hold BoC, adding that while thenext move by the Central Bank is to raise rates, it could be well into the future.
Key Quotes
"After keeping the policy unchanged yesterday and “modestly” more hawkish than Oct, BoC Gov Poloz was upbeat in an interview this morning, citing nascent signs of a gradual recovery in Canada. He did not show offer much concern regarding weaker energy prices."
"Poloz still emphasized the presence of slack and that the economy has plenty of room to run before it creates inflationary pressure."
"In the eyes of BofAML’s Canadian economists, that is consistent with an on-hold BoC, whose next move is a hike, not a cut, but that hike could be well into the future after several quarters of solid growth."
"BofAML’s FX and Rates Strategy see 1yr $CAD Digital Calls as the best tail-risk hedge against oil prices overshooting to the downside. FX Trading here are neutral $CAD here, waiting for a break of 1.1350 or 1.1450 before re-engaging."
Key Quotes
"After keeping the policy unchanged yesterday and “modestly” more hawkish than Oct, BoC Gov Poloz was upbeat in an interview this morning, citing nascent signs of a gradual recovery in Canada. He did not show offer much concern regarding weaker energy prices."
"Poloz still emphasized the presence of slack and that the economy has plenty of room to run before it creates inflationary pressure."
"In the eyes of BofAML’s Canadian economists, that is consistent with an on-hold BoC, whose next move is a hike, not a cut, but that hike could be well into the future after several quarters of solid growth."
"BofAML’s FX and Rates Strategy see 1yr $CAD Digital Calls as the best tail-risk hedge against oil prices overshooting to the downside. FX Trading here are neutral $CAD here, waiting for a break of 1.1350 or 1.1450 before re-engaging."