Property investors have been making hay while the sun shone – but are clouds looming?
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The Bank of Canada meets this week and will announce its decision on interest rates but while most economists are not expecting an increase there are some who believe otherwise.
A survey by Reuters found that 24 of 33 economists do not expect Governor Stephen Poloz to announce an increase Wednesday with October being favoured.
"With this bank you can't rule anything out. But after the pains they went through to signal July ... and then you get nothing, it just makes it difficult to believe they want to go again," Benjamin Reitzes, senior economist at BMO Capital Markets told Nasdaq.com.
However, Avery Shenfeld of CIBC Capital Markets is one of those with an alternative view. He believes that the central bank may raise interest rates to 1% this month and then announce a pause on further rates.
“After [last week’s] blowout GDP figures, we now see little reason for the BoC to wait before hiking interest rates again,” Shenfeld wrote in a client note, adding that it is a close call due to the strength of the loonie.
He continued that Governor Poloz and his team have been keeping a close watch on a basket of currencies against which the loonie is weaker than it was in July when the last rate rise was announced.
While there are others who would agree with Shenfeld’s forecast, there is a 75% chance of an October rise and just 25% for September.
A survey by Reuters found that 24 of 33 economists do not expect Governor Stephen Poloz to announce an increase Wednesday with October being favoured.
"With this bank you can't rule anything out. But after the pains they went through to signal July ... and then you get nothing, it just makes it difficult to believe they want to go again," Benjamin Reitzes, senior economist at BMO Capital Markets told Nasdaq.com.
However, Avery Shenfeld of CIBC Capital Markets is one of those with an alternative view. He believes that the central bank may raise interest rates to 1% this month and then announce a pause on further rates.
“After [last week’s] blowout GDP figures, we now see little reason for the BoC to wait before hiking interest rates again,” Shenfeld wrote in a client note, adding that it is a close call due to the strength of the loonie.
He continued that Governor Poloz and his team have been keeping a close watch on a basket of currencies against which the loonie is weaker than it was in July when the last rate rise was announced.
While there are others who would agree with Shenfeld’s forecast, there is a 75% chance of an October rise and just 25% for September.
