09:06 AM EST, 11/13/2024 (MT Newswires) -- The Bank of Canada has been the most aggressive rate cutter in the world -- along with Sweden's Riksbank-- and is primed to do more, said Bank of Montreal (BMO).

Financial markets are egging the BoC on, leaning to a follow-up 50bps chop in December, noted the bank. However, in

the head-long rush to bring rates down fast, BMO pointed out three things:

-- 1) Wages are proving to be mighty sticky. The BoC has

chosen to look past the near-5% year-over-year increases in the Labor Force Survey's average hourly wage measure, since its micro-data shows underlying trends are closer to 4%. But, the competing payroll survey is now sporting even "meatier" wage increases. The fixed-weight average hourly earning measure popped 5.7% year over year for August, the highest

reading in 30+ years of data. Meantime, labor unrest is, if

anything, ramping up -- such as port and pending postal strikes.

--2) Housing has woken up from its slumber, and it looks hungry. Sales jumped more than 30% year over year in October, tightening the market.

3) Financial conditions overall are already very favorable. The Canadian dollar (CAD or loonie) is probing 20-year lows, the TSX is at a record high, and five-year bond yields are down almost 100bps in a year.