Free Trial
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.
CANADA
- CIBC write that “in a perfect world, the BoC will end QT when the level of settlement balances reaches a steady-state “ample” level, which they have estimated somewhere between C$20bn-to-C$60bn”.
- The BoC could have also consider ending QT if repo rates persistently sit above the target rate. No official level has been discussed but CIBC “have long believed that a 5.0bps spread to the overnight rate could be enough to trigger such an outcome.”
- CORRA has been set around that threshold several times in the past few months. It has “forced the Bank to re-initiate Overnight Repo (OR) operations to inject cash into the system in an attempt to lower rates”. However, these “do not actually count in the CORRA calculation” so “without formal guidance as to the persistence of these operations, intra-day general collateral (GC) volatility will remain elevated.”
- CIBC think there are three reasons why CORRA is “starting to misbehave” despite still over C$120bn of reserves: “i) an inherent lag between banking sector liquidity preferences and real-time changes in the level of settlement balances, ii) seasonality associated with calendar year-end is evident, and iii) a growing concentration issue around the ultimate owners of these balances.”
- “Ultimately, we maintain our view that QT can afford to end when settlement balances are closer to C$80bn, which could occur around the summer. It is likely, however, that the Bank begins prepping the market for an end to QT around the April meeting. But, ending QT prior to that meeting is highly unlikely and highly unwarranted.”
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.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok