17 out of 23 economists expect the BoC to cut at least twice more this year

The market is pricing just one rate cut, on the other hand. The BoC has already cut quite aggressively and even delivered some insurance cuts for the trade war.

The underlying inflation rate in Canada has been rising steadily since last December and with the aggressive monetary easing and easing in trade war tensions, we could see upward pressure on inflation to remain.

This is what led the market to price out the second rate cut and if the economic activity picks up, we could see the market price out the remaining rate cut bets.

This week we have the BoC rate decision and a hold is widely expected. I would also expect the central bank to sound more hawkish in light of the recent setback on inflation.

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