Content and data provided by various third parties and Fidelity - Terms of Use
Print.Print
Small font size A Larger text size A Largest text size A

RBC Notes Importance of CPI Data Ahead of Wednesday's Bank of Canada Policy Decision

BY MT Newswires | ECONOMIC | 09/15/25 10:01 AM EDT

10:01 AM EDT, 09/15/2025 (MT Newswires) -- The focus this week is on the Bank of Canada's policy decision and RBC's forecast is still a very low conviction hold for Wednesday, but the decision could ultimately hinge on Tuesday's consumer price index data.

The BoC is slated to release its policy decision at 9:45 a.m. ET Wednesday.

Consecutive negative payrolls and a Q2 gross domestic product contraction have certainly increased the likelihood of a September BoC rate cut -- with OIS pricing an 85% chance, noted the bank.

If Tuesday's CPI reports a low print on core (0.1pp), then it could provide scope for a cut, a high print (0.3pp) probably leads to a hold, and middle ground number (0.2pp) makes it a very close call, stated RBC.

Government of Canada's (GoC) sovereign bonds outperformed United States Treasuries by around 8bps two weeks ago, added the bank. Under most plausible scenarios, the Federal Reserve should out-cut the BoC and coupled with growing domestic supply pressures, lead to structural underperformance of Canada.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

More Fixed Income News

All Fixed Income News

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

© 1998 – 2014 FMR LLC.

All rights reserved.
fir_news_article