Canada: Focus on CPI and retail sales - BBH

Analysts at BBH point out that Canada reports August CPI and July retail sales data but today's reports are unlikely to have much impact on expectations for Bank of Canada policy.  

Key Quotes

“After taking back the two rate cuts from 2015, the Bank of Canada is not in a hurry to move again.  Comments by Deputy Governor Lane earlier in the week encouraged the market to think again about the likelihood that it would deliver three hikes in three consecutive meetings.  The signals from the Bank of Canada do not appear that aggressive.  Next BOC policy meeting is October 25.  Right now, consensus sees no hike then.”

“The implied yield of the December BA futures has fallen a few basis points this week.  Coming into today's session, it is 10-12 bp above the low seen after the employment report on September 8.  Since then the US dollar has recovered from near CAD1.2065 to nearly CAD1.2400. Initial support for is now pegged by CAD1.22.”