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BOC Could Taper QE Next Week: NBF

CANADA
(MNI) OTTAWA
  • "To us, an announcement at next week's monetary policy meeting wouldn't come as a huge surprise," National Bank Financial's Warren Lovely and Taylor Schleich write in research note.
  • QE of at least CAD5b a week of federal bonds is much faster than the Fed, and sets pace to own 45% of those securities in 6m.
  • Scaling back shorter-end purchases would make more sense in terms of ensuring market liquidity
  • QE could be scaled back to CAD2-3b and still be meaningful
  • BOC may also wish to wait on any taper until govt presents a new fiscal plan with a sense of how much longer-term debt is coming, NBF report says
  • Other provincial bond program may be kept in place and not phased out like recent moves on mortgage bonds/BAs, given unclear macro outlook and financing needs
MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com
MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com

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