USDCAD has sold off over 100 pips immediately after Poloz talked about not cutting rates further
There was a large expectation to see Yellen Hawkish in her testimony today. The idea was that the NFP numbers that came out after the minutes would change her view point. But here is an excerpt from the minutes released last week that would have provided a clue that jobs was not the focus, rather inflation -
Next up was Poloz. Again, most trader's expected a further cut. But there are 2 factors here. First the Canadian housing market has been viewed by many as a potential bubble. It is not, however constant rate cuts can create one. Second, the rate cut we already saw in Jan was when oil was at absolute lows. We have since recovered quite a bit. The right expectation with oil at current levels would be a "wait and see" type response from the BOC.
There was a large expectation to see Yellen Hawkish in her testimony today. The idea was that the NFP numbers that came out after the minutes would change her view point. But here is an excerpt from the minutes released last week that would have provided a clue that jobs was not the focus, rather inflation -
Nonetheless, several participants saw the continuing weakness of core inflation measures as a concern. In addition, a few participants suggested that the weakness of nominal wage growth indicated that core and headline inflation could take longer to return to 2 percent than the Committee anticipated
Next up was Poloz. Again, most trader's expected a further cut. But there are 2 factors here. First the Canadian housing market has been viewed by many as a potential bubble. It is not, however constant rate cuts can create one. Second, the rate cut we already saw in Jan was when oil was at absolute lows. We have since recovered quite a bit. The right expectation with oil at current levels would be a "wait and see" type response from the BOC.
