MNI China Daily Summary: Thursday, April 22

MNI BRIEF: China To Quicken Resolving Local Debt Risks

RPT-MNI INTERVIEW: ECB's Wunsch Sees At Least Two Cuts By Dec

MNI BRIEF: Brazil CenBank Faces Greater Uncertainty - Campos

MNI: PBOC Conducts CNY2 Bln Via OMO Mon; Liquidity Unchanged

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS MON

EZ/UK T-Bill Calendar: 3/6-Month ATB Auction on Tuesday

EZ/UK Bond Supply Calendar: EU, FI Synds; IT, DE Auctions Tues

MNI: CANADA MAR INDUSTRIAL PRICES +0.8% MOM; EX-ENERGY +0.8%

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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MNI BoC Preview: Touch And Go For Another Downshift, Watch Terminal Talk

Source: Bank of Canada
Bank of Canada headquarters.

EXECUTIVE SUMMARY

  • The BoC is seen hiking either 25bp or 50bp on Wednesday in a very close call, with analysts in the Bloomberg survey fractionally leaning towards a 50bp hike and OIS pricing 32bps.
  • Data have been mixed with something for everyone but if pushed, we lean just towards a 25bp hike to better maintain optionality as the Bank nears a potential terminal rate.
  • The main two macro drivers for the call are the Q3 contraction in domestic demand (seemingly an important part of the Bank’s reaction function) and sequential core inflation moderating.
  • We certainly wouldn’t be surprised to see a 50bp hike and in the event of a 25bp hike would still expect moderately hawkish rate guidance to prevent an easing in financial conditions.
  • As always with non-MPR meetings, there is likely further detail from Dep Gov Kozicki speaking Thursday which could either firm or alter the initial market reaction.

PLEASE FIND THE FULL REPORT HERE:

BOCPreviewDec2022.pdf

Central Bank PreviewHomepageBoC - PreviewCentral Bank ReportsMarketsCanada Bank of Canada Market News
Central Bank PreviewHomepageBoC - PreviewCentral Bank ReportsMarketsCanada Bank of Canada Market News

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