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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.
MARKET INSIGHT
- The housing market is clearly important, but the BoC’s terminal rate will also depend on the evolution of household savings.
- 2Y OIS rates have climbed relentlessly this year, broadly in lockstep with the US until most recently being overtaken as the US breached 4% - which included a terminal rate seen briefly nudging 4.5% - after surprise strength in August CPI.
- There are however clear differences in household saving ratios, which could see differences in how the remainder of the rate hiking cycle plays out (with the BoC at 3.25% and Fed likely 3-3.25% next week).
- The US savings rate has fallen far below pre-pandemic levels but the Canadian savings ratio can still fall much further - if households are willing to run those low levels of precautionary savings - supporting consumption and demand-driven inflationary pressures in the process.
- The BoC has talked of upside risk to consumer spending from households spending accumulated extra savings from the pandemic, but equally, a stalling at the current level of savings could begin to weigh on demand and is worth watching closely as the economy slows as tighter financial conditions bite.
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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