- Canadian government bond yields have increased along with global rates, while the Canadian exchange rate has strengthened against the currencies of Canada's largest trading partners.
- Although the BoC is also likely to pull forward their guidance for when rate hikes are likely to begin (from 2023 to 2022), we don't think they should be in a hurry to raise overnight rates.
- Over the next several quarters, the Bank of Canada will be walking a tight rope, where they must balance the improved growth outlook, which has been driven by external factors, against still weak domestic fundamentals and worsening trends in public health.
For further details see:
Bank Of Canada: Walking A Tightrope