Good morning from Europe.

The hawks are on parade this week as the RBA and the BoC both surprised markets by delivering hikes against a relatively soft pricing. Could the Fed be tempted to do the same next week?

Bank of Canada was a tremendous leading indicator for the Fed earlier in this cycle, but they have lagged since the pause announced earlier this year. Bank of Canada referred to 1) Q1 growth, 2) April inflation and 3) A housing market rebound as three decisive factors for the decision to hike interest rates.

Using the same set of parameters, the Fed could easily reach the same conclusion.

Chart 1: Is the BoC behind the Fed curve now?