The iShares MSCI Canada Index ETF (NYSE:EWC) will be in heavy focus over the next couple of weeks, as the Bank of Canada weighs a potential interest rate hike.
Following the Federal Reserve’s lead and shifting to a more hawkish policy won’t come without very careful consideration, however. Although its housing market is booming, Canada’s economy is on shaky footing amid historically low oil prices.
Bloomberg notes that a key meeting this week could provide some clues as to where the bankers’ heads are at:
The place for Bank of Canada watchers to be on Monday is the Albany Club in Toronto, where a business association is hosting a private lunch event with Deputy Governor Larry Schembri.
The event, which is off the record and closed to the media, comes at a particularly sensitive time for interest rates. Two weeks ago, the central bank began to set the stage for increases, leading some investors to place bets on a move at the July 12 meeting. Schembri’s presentation to the Toronto Association for Business and Economics is one of the last appearances by a top central bank official before that date.
While the meeting will be held behind closed doors, we may well see some info leak from there in the coming days. If the Fed’s behavior is any indicator, the Bank of Canada will look to avoid any surprises with its decision, and could prefer to send very clear clues about what’s coming beforehand.
The iShares MSCI Canada Index ETF (NYSE:EWC) was unchanged in premarket trading Monday. Year-to-date, EWC has gained 0.80%, versus a 8.77% rise in the benchmark S&P 500 index during the same period.