Analysts at TD Securities noted that the Bank of Canada's (BoC) decision to hike the policy rate by 50 basis points to 4.25% was a mild hawkish surprise relative to market pricing and the analyst community.

Statement was more balanced than previous months

"The larger surprise was the Bank's signal that it may be finished with rate hikes as it softened its forward guidance, implying that 4.25% will be the Bank's terminal rate."

"The statement itself was more balanced than previous months, with the Bank citing evidence that interest rates are working to slow demand and that inflation momentum is softening. The Bank's new guidance suggests a more data-dependent approach going forward, and we look for the Bank to keep rates unchanged in January."