1010 ET - The pivot by markets on Canadian rates appears misguided, and traders might be too "extreme" in their bearish Canadian-dollar positioning. says Montreal-based trading and research firm PGM Global. PGM says traders are scaling back the scope of Bank of Canada rate cuts based on a pickup in CPI in October. "We would bet on a faster pace of cuts," the firm says. The hotter-than-expected October data was due to "noise/methodology issues," related to property taxes, which reflect previous house-price appreciation. "Inflation is cooling," the firm says, adding that the labor market is soft. Rate spreads, relative to the US, have weighed on CAD, but PGM says the bearish position "is so extreme that a tactical bet on a CAD bounce," looks tempting.(Paul.Vieira@wsj.com; @paulvieira)
(END) Dow Jones Newswires
November 27, 2024 10:10 ET (15:10 GMT)
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