Markets increasingly expect the Bank of Canada’s next move will be a rate hike next year, as the country’s unexpected labour market strength suggests further monetary easing may not be needed despite U.S. tariffs.

Traders in overnight swaps are now fully pricing a hike from the central bank by October 2026. Just a day earlier, markets were assigning some probability of Governor Tiff Macklem and his officials cutting borrowing costs over the next year.

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