Canadan Short-term interest rate speculation

BAX Futures are pricing in a chance for a quarter-point rate cut by the Bank of Canada:

Month / Strike Bid Price Ask Price Settl. Price Net Change Vol.
+ 12 JN 98.740 98.745 98.740 0.005 17775
+ 12 JL 0.000 0.000 98.735 0.000 0
+ 12 AU 0.000 0.000 98.725 0.000 0
+ 12 SE 98.940 98.950 98.940 0.000 54050
+ 12 DE 98.980 98.990 98.980 0.000 49142
+ 13 MR 98.940 98.960 98.940 0.020 33314
+ 13 JN 98.920 98.930 98.910 0.020 23069
+ 13 SE 98.880 98.900 98.880 0.010 4780
+ 13 DE 98.860 98.870 98.850 0.020 1467
+ 14 MR 98.820 98.840 98.810 0.020 960
+ 14 JN 98.770 98.780 98.760 0.210 571
+ 14 SE 98.710 98.730 98.690 0.020 101
+ 14 DE 98.650 98.670 98.630 0.020 83
+ 15 MR 98.580 98.600 98.580 0.010 136

I personally don’t see it happening – Mark Carney is going to hold pat at 1%.

The following is a chart of 1-year Canadian treasury note yields:

What I find interesting is that just a month ago the market was pricing in a significant increase of interest rates – something flipped like a switch, and this is undoubtedly due to the theatrics going on in Europe at the moment. Big players are raising cash and this is depressing asset prices.