25 of 27 economists surveyed by Bloomberg expect the Bank of Canada (BoC) to lift short-term rates by 1/4 point tomorrow.
Overnight index swap (OIS) traders are betting on higher rates as well. They’re pricing in a 75%+ probability of a hike on Tuesday. (Overnight index swaps provide a gauge of what the overnight rate is expected to average over a given period–in this case, over the next month.)
If the BoC does raise its key lending rate, it would be the first increase since July 2007—right before the credit crisis unfolded.
It would also be Mark Carney’s first hike as BoC governor.
Hey Rob, Thanks for the OIS link. I’ve been looking for this data for weeks!
Dale
Did anyone see Fridays 6.1% GDP increase?? That is the kind of number you expect from China or some other hypergrowth economy. I think tomorrow will be the first of many rate hikes to come.
CMT,
Could you explain the cut off for lenders?
If (when) fixed rates go up today, is there a specific cut off time that brokers need to have deals in by to ensure they can get the old (lower) rate?
Or will the brokers need to find the lender who has not up’d their rate yet and submit all their deals there?
Thanks
Josh.
TD Still has their HELOC at Prime plus 1. When prime goes up…I wonder how long it will take (and at what point) the banks will drop back to prime.
One thing people often forget about Chinese growth is that the base GDP/capita in China is very low at $3,500 (IMF). China doesn’t even figure in the top 50 countries, it sits close to the bottom. So an increase of $500/capita in China is about 14% growth – sounds impressive. A $500/capita increase in Canada is about 1% – not so impressive. I think the Chinese economy is vastly pumped-up, it’ll likely burst in one way or another.
Hi Josh, Fixed rates are not going up today. On days when they do go up, the cutoff is often midnight. However, some lenders don’t provide any notice whatsoever, and others set their own submission deadlines.
Cheers,
Rob