Henry Liu
Former FPA Special Consultant
- Messages
- 473
Bank of Canada (BOC) will once again meet for their Overnight Rate (Interest Rate) and the decision will be announced today at 9:00am sharp. Along with the rate decision, BOC Carney will also announce a Rate Statement to further explain today’s decision. Here’s what analysts are expecting:
9:00am (NY Time) CA BOC Rate Decision Forecast 1.00% Previous 1.00%
ACTION: USD/CAD SELL 1.25%
The Trade Plan
BOC (Bank of Canada) will be keeping its Overnight Rate unchanged as most analysts agree... However, BOC is likely to still remain optimistically cautious in its tone but for the time being the general market is expecting for a pause.
I'll be trading this release using Spike Trading method as in the event of a surprise hike it is almost guaranteed that we'll see strong market movement immediately after the release.
For more information on my Spike trading method, please read:
Henry's News Trading Method
The Market
BOC Carney is likely to keep rates unchanged as the overnight swap is pricing in less than 10% of probability of an interest rate hike during this meeting. But most analysts agree that BOC will raise rates to around 2.00% before the end of the 2011.
Fundamentally speaking, BOC is likely to take a cautious approach to this sensitive issue, especially with USDCAD currently trading beyond parity. With CAD appreciating rapidly, pressure on Canadian exports will rise and economy may be facing some head winds, which is precisely why most analysts don't expect rate hike during the first quarter of 2011.
Additional Thoughts
It is extremely likely for BOC to keep rates unchanged. Market may react to the accompanied statement, but I believe this would probably be a no trade.
Pre-News Considerations
No Pre-News trading...
Historical Chart & data for BOC Rate Decision
Thanks,
9:00am (NY Time) CA BOC Rate Decision Forecast 1.00% Previous 1.00%
ACTION: USD/CAD SELL 1.25%
The Trade Plan
BOC (Bank of Canada) will be keeping its Overnight Rate unchanged as most analysts agree... However, BOC is likely to still remain optimistically cautious in its tone but for the time being the general market is expecting for a pause.
I'll be trading this release using Spike Trading method as in the event of a surprise hike it is almost guaranteed that we'll see strong market movement immediately after the release.
For more information on my Spike trading method, please read:
Henry's News Trading Method
The Market
BOC Carney is likely to keep rates unchanged as the overnight swap is pricing in less than 10% of probability of an interest rate hike during this meeting. But most analysts agree that BOC will raise rates to around 2.00% before the end of the 2011.
Fundamentally speaking, BOC is likely to take a cautious approach to this sensitive issue, especially with USDCAD currently trading beyond parity. With CAD appreciating rapidly, pressure on Canadian exports will rise and economy may be facing some head winds, which is precisely why most analysts don't expect rate hike during the first quarter of 2011.
Additional Thoughts
It is extremely likely for BOC to keep rates unchanged. Market may react to the accompanied statement, but I believe this would probably be a no trade.
Pre-News Considerations
No Pre-News trading...
Historical Chart & data for BOC Rate Decision
Thanks,
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