Carney's deputy seen as favorite to take over at Bank of Canada

Mon Nov 26, 2012 5:03pm EST
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* BoC No. 2 Tiff Macklem is clear front runner

* Macklem sees eye-to-eye with Carney on policy

* Would likely maintain plan to hike rates eventually

* Other names include Don Drummond, Jean Boivin

By Randall Palmer

OTTAWA, Nov 26 (Reuters) - The Bank of Canada's senior deputy governor, Tiff Macklem, is the early favorite to replace Mark Carney as the head of the central bank, pointing to a steady-as-she-goes policy that points eventually to higher interest rates.

The policy picture would be less clear, however, if an outsider were brought in for the top Bank of Canada job, something that the bank has done on the last two occasions.

"He's been very involved with the governor since the credit crunch began, and we know that the two see eye-to-eye on many of the dynamics that are occurring in Canada right now," Ian Pollick, fixed income strategist at RBC Capital Markets, said of Macklem.

That said, the uncertainty introduced with the surprise appointment of Carney to the Bank of England weakened the Canadian dollar and boosted bond prices as markets bet on a chance, however slight, of a more dovish policy.   Continued...