Some market players suddenly think Bank of Canada could cut rates
Article by Michael Babad, The Globe and Mail, January 13, 2015
“Some market players are now betting that the Bank of Canada could cut interest rates, rather than hike.
The speculation is mild at this point, but it’s the shift in sentiment that’s important, said chief currency strategist Camilla Sutton of Bank of Nova Scotia.
This shift began Friday as Statistics Canada released what was seen as a weak labour market report, showing a loss of 4,300 jobs in December and the unemployment rate holding at 6.6 per cent.
As The Globe and Mail’s David Parkinson reported, December marked two consecutive months of jobs losses, though the numbers were actually better than they looked because of the strength in full-time employment.
Still, some in the markets suddenly changed their view, speculating that the Bank of Canada could cut its benchmark rate from 1 per cent at some point in the next year, Ms. Sutton said.
Before that, the speculation had been on when the central bank under Governor Stephen Poloz could raise rates for the first time.
That’s not to say that Ms. Sutton sees a rate cut in the cards, only that some others do.”
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