The Bank of Canada under Governor Tiff Macklem hasn't been afraid to surprise markets and his latest opportunity comes today at 9:45 am ET.
The Canadian housing market is hitting tough times and consumer spending is slowing, that means that the 4.50% overnight rate is unnecessarily restrictive. They're on track to slowly bring that down over the year ahead but might they want to speed up the process?
I think they should and the odds are higher than the 23% priced in but I would still put them below 50%. If so, expect a kneejerk lower in the Canadian dollar.
Also keep in mind this picture:
It was taken last month at Jackson Hole and in the group-think world of central banking, a larger cut from Canada could signal something similar from the Federal Reserve.
