BNP: BoC unlikely to hurt CAD; RBNZ highly sensitive to Q3 inflation print

From the FXWW Chatroom: We see a dovish surprise from the Bank of Canada (BoC) meeting this week (Wednesday) as unlikely; Canadian economic data and oil prices are holding up relatively well so the market is unlikely to price in more BoC easing soon. Canadian inflation data for September will be released at the end of the week.  Our BNP Paribas STEER™ model continues to run a short USDCAD recommendation, targeting a move down to 1.3028 (see here). Elsewhere in the commodity bloc, the focus this week will be on New Zealand’s release of Q3 CPI (Tuesday). Reserve Bank of New Zealand (RBNZ) Assistant Governor John McDermott recently stated that continued low inflation would cement the case for further easing and a cut at the 10 November meeting is now 85% priced in. Given that a rate cut is almost fully priced, NZDUSD has scope to bounce if inflation surprises to the upside. Wednesday brings the release of Australia September employment data.

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