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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.
CANADA
- Dep Gov Gravelle speaks today on the “Normalization of the Balance Sheet”, with text at 0935ET before the event at 0950ET including audience Q&A.
- This time last year, Gravelle indicated QT could run until settlement balances at the BoC reached an estimated steady state of C$20-60bn in late 2024 or early 2025 (eyeing a 1-2% GDP level vs the 10-13% GDP in the case of the US), after which the BoC would start buying assets again as part of their regular balance sheet management process.
- Settlement balances were a little below C$200bn at the time vs ~C$100bn over the past week. It’s a rate of decline that suggests the late 2024 guidance could still hold but it will depend on any updates to the estimated steady state.
- The maturity profile of BoC holdings gives it some time. There is a heavy C$23bn of GoCs rolling off the balance sheet on Apr 1, too close to realistically do anything about, but after that the monthly pace is slower. It still sums to C$21bn between May and year-end but is concentrated with C$10bn in Sept. That could start to be the focal point for bonds to no longer fully roll-off.
- BoC officials at the March press conference have at least partly indicated a change today: “Dep Gov Rogers: We’ve said from the beginning that we’re going to be transparent and predictable, with bonds rolling off the balance sheet as they mature. We expect to continue as we’ve planned. QT is something we discuss at every meeting… if our view/strategy is going to change we’ll give advance notice of that. Gov. Macklem: our colleague Dep Gov Gravelle will have a little more to say at his speech in a couple weeks”.
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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