09:21 AM EDT, 09/17/2025 (MT Newswires) -- Markets are fully pricing in a 25bps rate cut by the Bank of Canada on Wednesday, said ING.

The BoC is slated to release its policy statement at 9:45 a.m. ET on Wednesday.

Tuesday, Canada reported headline inflation at 1.9% year over year, below the 2.0% consensus, while core measures were unchanged at 3.0/3.1% as expected. It's an inflation picture that isn't concerning enough to prevent a resumption of rate cuts, given the backdrop of job market deterioration, noted the bank.

Unemployment has reached 7.1%, the highest since 2021, the economy contracted by 1.6% quarter-over-quarter annualized in Q2, and activity surveys point to further downside risks.

ING expects another cut by the BoC in December, which is now also almost fully priced in. The BoC has kept its guidance very open-ended, and the bank doubts policymakers want to push back against easing bets at this meeting.

The reaction in the Canadian dollar (CAD or loonie) on Wednesday may not be that significant, as markets retain strong data dependence for any material adjustments in rate expectations.

ING retains a bearish bias on CAD against most of the G10, although USD weakness can keep USD/CAD stable or slightly offered around 1.37.