this is a test, please ignore

MNI BRIEF: Text of Bank Of Canada Interest-Rate Decision

MNI BRIEF: Text Of BOC Press Conference Opening Statement

MNI China Daily Summary: Wednesday, July 24

MNI: PBOC Net Drains CNY203.9 Bln Via OMO Wednesday

MNI: PBOC Sets Yuan Parity Higher At 7.1358 Weds; -0.98% Y/Y

US EIA: CRUDE OIL STOCKS EX SPR -3.74M TO 436.5M JUL 19 WK

Services PMI Gains Continue To Diverge From Soft Manufacturing

MNI: US JUN NEW HOME SALES -0.6% TO 0.617M SAAR

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Bailey notes language change in March meeting significant; SONIA moves up

BOE
  • Bailey says shock from energy prices will be bigger than any single year in the 1970s (but caveats that with the 1970s seeing a sustained rise over many years).
  • He says the Bank doesn't have any policy tool to make that go away. Reiterates this is a terms of trade shock.
  • What might disrupt the temporary nature? Supply chains have two side risks. Omicron is having less impact than the Bank thought (and they hadn't expected a large impact). Labour market is very tight.
  • Very high level of uncertainty. Task is clear but hard. Appropriate to tighten policy, but do so recognising uncertainty and know that there are risks to both side. Going forward need to recognise uncertainty. This is why they changed forward guidance at the last meeting - it is a recognition of the uncertainty.
  • Nothing super new here, but Bailey is pointing to the change in language in the March meeting as being significant - something we pointed out at the time. Market is now reacting to this with gilts / SONIA futures moving higher. Dec-22 SONIA future up 10 ticks.
HomepageBulletMarketsFixed Income BulletsForeign Exchange Bullets

To read the full story

Close

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.