BoC expected to leave rates on hold at 1.00% on Wed - Rabobank

Analysts at Rabobank expect the Bank of Canada to leave rates on hold at 1.00% on Wednesday, 25th October.

Key Quotes:

This meeting will be accompanied by the fourth and final Monetary Policy Report (MPR) of 2017 and there will also be a press conference with Poloz and Wilkins.

We expect the Bank to maintain a cautious tightening bias with the door open for a 25bp hike in December. The OIS curve currently implies around a 40% chance of a December move.

USD/CAD is highly vulnerable to rate differentials at the moment and so any sign that December is off the cards would likely see USD/CAD test 1.2780.

Conversely, if the Bank signals the start of a more robust tightening cycle then we could plumb the depths seen in early September. We see this as a less likely scenario.