BMO Economics On What Does Today's Jobs Data Imply For Bank of Canada Policy

Bank of Montreal Economics in its 'Talking Points' note of this Friday asked: What does today's strong jobs data imply for Bank of Canada policy, with the central bank meeting next week and its inflation target renewal due imminently?

Were it not for the latest COVID curveball, BMO said, it would seem like an "open field" for the Bank to start laying the groundwork for rate hikes out of the gate in 2022.

BMO added: "Between 4.7% inflation, a tight jobs market, torrid housing, and a cool currency, there is little standing in their way. And the market continues to hand it to them on a platter, now fully priced for a hike by March, and more than 125 bps of total rate hikes for next year. With the Fed now sharpening its tightening talons, and the rapid and more complete recovery in domestic employment, that market pricing suddenly looks much more reasonable."