{"id":38619,"date":"2022-12-06T14:52:00","date_gmt":"2022-12-06T14:52:00","guid":{"rendered":"https:\/\/youtrading.com\/en\/?p=38619"},"modified":"2022-12-06T22:54:43","modified_gmt":"2022-12-06T22:54:43","slug":"market-insight-bank-of-canada-preview-2","status":"publish","type":"post","link":"https:\/\/youtrading.com\/en\/market-insight-bank-of-canada-preview-2\/","title":{"rendered":"Market Insight – Bank of Canada Preview"},"content":{"rendered":"\t\t
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Markets now look towards the Bank of Canada rate decision on Wednesday, marking what with be the second central bank policy decision this week.<\/p>

Markets are pricing in only a 25-basis point hike at the moment as\u00a0recession fears are rising and policy is in restrictive territory, meaning that the top in rates looks\u00a0close. 75 Basis hikes have likely passed.<\/p>

ING Bank note that \u201cThe Bank of Canada (BoC) has raised interest rates a cumulative 350bp since the first move in early March and we look for a further 50bp hike on Wednesday. Third-quarter GDP came in at 2.9% annualised, nearly double the consensus forecast\u00a0rate, while inflation at 6.9% continues to run at more than three times the 2% target.<\/p>

The Bank adds that \u201cThen we had last Friday\u2019s 108,300 increase in Canadian employment, meaning that there are now 523,000 more Canadians in work than there were before the pandemic struck in February 2020.\u201d<\/p>

The Bank of Canada raised the target for its overnight rate by 50bps to 3.75% in its October 2022 meeting, below broad expectations that pointed to a more aggressive 75bps increase.<\/p>

Still, it marked the sixth consecutive rate hike, adding to the 350bps in interest rate increases in the current tightening path and pushing borrowing costs to their highest since 2008.<\/p>

Policymakers also signaled that interest rates will need to rise further to curb inflation, as the bank\u2019s preferred measure of core inflation has not shown meaningful evidence of easing.<\/p>

The updated CPI projections point to inflation to be at 3% by 2023 before returning to the target level of 2% by 2024. Regarding growth, the BoC expects the Canadian economy to expand a slower 3.25% this year and less than 1% in 2023. The central bank also said it will continue its policy of quantitative tightening.<\/p>

Overall, I expect a final 25 basis point rate hike from the Canadian central bank, however, the Canadian dollar<\/a> could be one to watch if they surprise with a 50-basis point hike.<\/p>

We are also seeing signals in Europe and the US that inflation is showing more signs of slowing and if that happens again in Canada, it could work against this latest rise.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

Markets now look towards the Bank of Canada rate decision on Wednesday, marking what with be the second central bank policy decision this week. Markets are pricing in only a 25-basis point hike at the moment as recession fears are rising and policy is in restrictive territory, meaning that the top in rates looks close. 75 Basis […]<\/p>\n","protected":false},"author":4,"featured_media":38621,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[9],"tags":[206,346,31],"yoast_head":"\nMarket Insight - Bank of Canada Preview - Youtrading UK<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/youtrading.com\/en\/market-insight-bank-of-canada-preview-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Market Insight - Bank of Canada Preview Market Insight - Bank of Canada Preview\" \/>\n<meta property=\"og:description\" content=\"Markets now look towards the Bank of Canada rate decision on Wednesday, marking what with be the second central bank policy decision this week.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/youtrading.com\/en\/market-insight-bank-of-canada-preview-2\/\" \/>\n<meta property=\"og:site_name\" content=\"Youtrading UK\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/YouTradingEnglish\/\" \/>\n<meta property=\"article:published_time\" content=\"2022-12-06T14:52:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-06T22:54:43+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/youtrading.com\/en\/wp-content\/uploads\/2022\/12\/ferran-fusalba-rosello-WgUHuGSWPVM-unsplash.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"640\" \/>\n\t<meta property=\"og:image:height\" content=\"449\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Nathan Batchelor\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Market Insight - 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