Canada surprises markets with quarter-point cut

The Bank of Canada's rate-setting board voted unexpectedly on Tuesday to cut its benchmark overnight rate by 25 basis points to 4.25%.

Markets had priced in rates staying put but the central bank said that since the publication of the Monetary Policy Report in mid-October, there had been "a number of economic and financial developments that have a bearing on the prospects for output and inflation."

Both core and CPI inflation, currently 2.4% and 1.8%, were below the central bank's expectations

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