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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.
STIR
While the FOMC policy decision grabbed the headlines overnight, Canada released the BoC Minutes for the 8 March meeting. With the AU STIR in a ‘policy pause’ vigil ahead of the RBA’s April meeting, the BoC Minutes provided some insight into the deliberations ahead of the first pause in this tightening cycle.
- First, the BoC paused despite worrying about sticky prices and wage gains, and elevated inflation expectations.
- Secondly, they paused without actively debating a ninth straight increase.
- Thirdly, BoC officials said that they were likely on hold unless inflation veers away from a projection for CPI to slow to about 3% at midyear and back to the 2% target in 2024.
- Finally, the Governing Council saw “…the pause as an opportunity to learn whether interest rates had increased enough to return inflation to the 2% target."
- By the close, after the FOMC decision, CA STIR had 31bp of easing priced by July and 67bp priced by the December meeting.
- With the above key themes likely to be very familiar to RBA watchers, the BoC Minutes are unlikely to unnerve the AU STIR today, particularly after the dovish hike from the FOMC.
- RBA dated OIS is currently pricing no change from the RBA in April and 35bp of easing by year-end, the BoC Minutes
Figure 1: AU Vs. CA STIR
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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