Bank of Canada likely to hike rates in 2019 but not next week - Wells Fargo

Next week will be the Bank of Canada meeting. No change in rates is expected. According to analysts from Wells Fargo, the meeting could offer clues for when the next rate hike could take place. 

Key Quotes: 

“The Bank of Canada (BoC) is likely to hold its overnight rate steady at 1.75% when it announces monetary policy next week. At its latest meeting in early December, the central bank sounded more cautious with regards to the domestic economic outlook, in part due to the ongoing weakness in oil prices. Moreover, it said there was “more room for non-inflationary growth,” a sign it likely felt less urgency to normalize interest rates. Amid that more dovish signaling, market pricing for future BoC rate hikes has fallen substantially in recent weeks.”

“Despite more dovish BoC language, we still think the central bank will hike rates further in 2019. Headline inflation has eased, but core inflation has held relatively steady near the BoC’s 2% target, while Canadian economic growth generally remains above potential. Next week’s policy decision could provide clues for when that next hike could be delivered.”