MNI China Daily Summary: Monday, July 29

MNI: China CFETS Yuan Index Up 0.15% In Week of Jul 26

MNI: PBOC Net Injects CNY243.37 Bln via OMO Monday

MNI: PBOC Sets Yuan Parity Higher At 7.1316 Mon; -1.56% Y/Y

CHINA PBOC CONDUCTS CNY301.57 BILLION VIA 7-DAY REVERSE REPOS MON

CHINA SETS YUAN CENTRAL PARITY AT 7.1316 MON VS 7.1270

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BoC Speech Announcement Ramps Up Discussions On Fading QT

BOC
  • Deputy Governor Toni Gravelle delivers speech on normalizing the balance sheet March 21, updating his earlier benchmark address.
  • BoC previously stated QT would cease in H2 2024 or H1 2025 when settlement balances reach range of CAD20B to CAD60B.
  • Since then, CORRA has continued to trend above target in 2024 by 4-5bps according to the National Bank of Canada.
  • Settlement Balances reached CAD108B on Feb 14 from CAD123B last month. The peak was CAD394B in March 2021.
  • NBC says that CAD37B rolls off balance sheet over the next 4M.
  • Speech announcement comes as the Fed also picks up on QT talks. Chair Powell said after the last rate decision the FOMC plans “more in depth discussions in March.”
  • Macklem stated at the last BoC press conference it was too soon to start talking about ending QT.
  • Bank reinstated Receiver General cash balances auctions to address liquidity. Scotia says this could signal BoC doubling down on QT by providing funding while continuing to normalize the balance sheet.
  • RBC says QT may end at BoC's April announcement.
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