Analysis: Trader incorrectly priced the Bank of Canada's interest rate path.

Spectra Markets President Brent Donnelly stated that traders have incorrectly priced in the possibility of the Bank of Canada raising interest rates later this year. Donnelly noted that overall inflation in Canada is below 2%, and unemployment rates remain high. He said, "In my view, the degree of tightening that traders expect from the Bank of Canada is almost impossible, even if oil prices remain above $100 for the rest of the year." The Bank of Canada will announce its next interest rate policy decision on Wednesday. Donnelly added that for fixed-income traders, "there is not much profit to be made in either direction" because in the current environment, both cutting or raising rates may not be a wise move.