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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
STIR
The AU-CA official rate differential narrowed to +15bps yesterday as the BoC delivered the widely expected 25bp cut to 4.50%.
- With a 90% probability of the cut priced in, the market's reaction was limited despite Governor Macklem noting, “With the target in sight and more excess supply in the economy, the downside risks are taking on increased weight in our monetary policy deliberations”.
- On a relative basis, the OIS market expects the official rate in Canada to be 28bps below that of Australia by year-end. If this occurs, it would be the first time since 2018.
- Even more interestingly, looking 12 months ahead using 3-month swap rates 1-year forward (1Y3M), the market expects the RBA’s official rate to be 75bps higher than the Boc’s.
Figure 1: AU & CA 1Y3M Rates (%)
Source: MNI – Market News / Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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