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More needs to be done…
Central banks in Canada and Australia raised rates somewhat surprisingly this week. Better than expected economic developments and elevated inflation are forcing central banks to reconsider whether they have raised rates to a sufficient high level in order to restore price stability. The BoC has by many been seen as the canary in the coal-mine when it comes to G10 central banks. When they paused, markets bet that other central banks would also pause. Now that BoC is hiking again, markets are questioning peak rates and rate cut in H2 2023 narrative. We still believe that rate markets are pricing in too low rates this ... (full story)