The Bank of Canada is expected to raise its key interest rate by 25 basis points on Wednesday.

“Markets and all economists at all dealers anticipate a hike this time around,” says Derek Holt, vice-president and head of capital markets economics at Scotiabank, in a weekly economics report.

Read: Rising rates shake client confidence

But despite impressive employment reports for November and December, the lowest unemployment rate in decades and a positive business outlook survey, the rate hike “isn’t entirely clear cut,” says Benjamin Reitzes, Canadian rates and macro strategist at BMO, in a weekly economics report.

“If you’re looking for reasons in the data for the BoC to take a pass, there are a few,” he says.

For example, though labour markets have tightened, wages are soft, up only 2.7% year-over-year, says Reitzes. Also soft is international trade, “though this alone is hardly a reason [for the BoC] to stay on hold,” he says.

Beyond the economic data, other negatives are NAFTA uncertainties, household debt and new mortgage rules, says Reitzes. “While the BoC has said they will not allow uncertainties to paralyze policymaking, we’ll see if their actions match their words,” he says.

Referring to NAFTA uncertainty, Holt says, “Every poker player plays the hand they’ve been dealt, not the one that might be dealt in the next round.”

Likewise, in a weekly economics report, TD says it expects governor Poloz’s data dependence to outweigh his risk management framework.

Read: Will BoC hike rates if Trump dumps NAFTA?

Dovish details

Accompanying this week’s expected hike, the central bank’s comments and monetary policy report will probably be relatively cautious, says Reitzes.

“The uncertainties previously highlighted by the bank are still present and likely won’t dissipate until the April meeting at the absolute earliest,” he says.

Thus, a rate hike doesn’t mean the BoC will embark on a rapid tightening cycle. Holt says he expects a dovish hike.

“To hike and warn of ongoing uncertainties may deliver somewhat softer overall financial conditions beyond just short-term rates as an offset,” he says. “It would also serve the purpose of boosting confidence through a steady hand on the wheel while retaining high optionality toward future decisions.”

Economist Dina Ignjatovic also expects a dovish decision. In the TD report, she says: “Given high household debt levels, uncertainty surrounding the impact of the B20 mortgage measures and risk associated with the NAFTA renegotiations, the [central] bank must be careful in how quickly it raises rates so as to not derail the economy. As such, we expect a gradual pace of tightening over the next two years, of about 25 bps every six months.”

Read the full reports from Scotiabank, BMO and TD.

Also read:

End-of-cycle positioning for portfolios

Canada, U.S. won’t drive global growth over next two years: Scotiabank