Avery Shenfeld Bank Quotations

The Bank of Canada remains on the warpath against inflation in an economy where recent job and production gains are, in its view, too much of a good thing.

Central banks continue to be guided by macroeconomic models that relate to an economy that no longer exists.

We expect the combination of a U.S. growth moderation and the lagged impacts of a strong Canadian dollar on factory employment to do a lot of the work in engineering that cooling in Canadian hiring, leaving the Bank of Canada with only another 50 basis points in rate hikes.

All told, a fairly strong reading that will only buttress the Bank of Canada's case for remaining hawkish.

If markets felt the Bank of Canada was going to press on with rate hikes after the Fed stopped, that could fuel an overheated Canadian dollar, providing too much of a braking force on exports.

Today's statement ups the odds that the Bank of Canada will be back again with a 25 bp (basis point) 'Christmas present' in December.