Bank of Canada rate hike seen as 'canary in a coal mine' as Fed decision looms

Derek Holt, head of capital markets economics at Scotiabank, said the central bank’s decision “blew a foul stench over world bond markets.”

“Bond yields in both countries could see further upward pressure from here to September, as markets will price in risks of subsequent hikes for a while, and will also feel the impact of a rush of U.S.

Canada, however, did not act alone. Stephen Brown, deputy chief North America economist at Capital Economics, said the Reserve Bank of Australia hiking last week against consensus expectations of a hold was also a major part of the reaction from global markets.

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