Volatility alert: Bank of Canada’s Interest Rate Decision on Wednesday.
The Bank of Canada is expected to announce its decision on the interest rate tomorrow, at 14:00 (GMT).
BoC is expected to hike rates by 25 basis points (bp), with interest rates reaching +1.50%.
Market is currently pricing in the probability of a 25 bp rate hike by 93.75%, according CAD Overnight Index Swaps.
We also see the case for a 25bp rate hike as recent financial data seem to favor such a scenario.
Please be advised though that uncertainty in trade relationships (especially with the US) may be an issue mentioned in the accompanying letter.