(Bloomberg) -- Half of Canada’s six biggest commercial lenders now expect the central bank will keep hiking interest rates instead of pausing, after the December jobs report blew past expectations.

Canadian Imperial Bank of Commerce flipped its call on Friday, joining Bank of Montreal and Toronto-Dominion Bank in forecasting that the Bank of Canada will raise interest rates by another 25 basis points to 4.5% at its Jan. 25 meeting. 

Evidence is mounting that Canada’s economy isn’t slowing as rapidly as economists were anticipating, raising questions about whether the central bank should continue lifting interest rates to further slow demand and rein in inflationary pressures.

The shift in sentiment came after Statistics Canada reported that the country added 104,000 jobs in December, prompting overnight swaps traders to raise the odds of a 25 basis-point increase to nearly 90%, up from about two-thirds previously. The loonie rose by more than a cent to trade at C$1.3438 per US dollar at 3:32 p.m. Ottawa time — its highest level in a month.  

“This was an incredibly robust report. All the talk that we’re hearing of Canada being in a recession or heading into a recession, those talks are pretty quiet today,” James Orlando, a senior economist at Toronto-Dominion, said on BNN Bloomberg Television. “Across industries we’re seeing job gains.” 

Royal Bank of Canada analysts expect to update their forecast on Tuesday after the jobs report made their earlier call for a pause “a lot less likely,” Josh Nye, the bank’s senior economist, said in a telephone interview. 

Bank of Nova Scotia said it’s waiting for additional data in the coming weeks before firming up its call, while National Bank of Canada maintains its expectations for a pause.

The upcoming Business Outlook Survey by the central bank and the December inflation data — set to be released on Jan. 16 and 17, respectively — “will have a significant influence on the next decision and could lead us to change our view,” Matthieu Arseneau, National Bank’s deputy chief economist, said in an email. 

Governor Tiff Macklem and his officials have slowed down the pace of rate hikes and signaled that future decisions will depend on economic data. The central bank has already raised borrowing costs by 4 percentage points since March, bringing the benchmark overnight rate to 4.25%.

(Adds comment from Toronto-Dominion economist, updates Canadian dollar trading)

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