BoC Governor Poloz surprised markets with a relatively hawkish tone - TD Securities

Commenting on Bank of Canada (BOC) Governor Stephen Poloz's comments on Thursday, "Governor Poloz surprised markets with a relatively hawkish tone in his fireside chat on Economic Change and the Path Forward," said TD Securities analysts.

Key quotes

"Poloz said the economy is in a good place and described monetary policy as "about right." However, the Bank continues to monitor for signs of spillovers and we do not think they will hesitate to act should the outlook deteriorate further."

"FX: Today's comments reinforce our tactical bias for USDCAD to trade lower. We look for the post-Wilkins rally to be unwound and estimate FV closer to 1.3150."

"Rates: Poloz remarks were negative for Canadian bond performance relative to the US, as he cited comfort with current inflation levels, and noted they are positive sign for the economy as currently levels."