MNI China Daily Summary: Monday, October 21

MNI: GERMANY SEP PRODUCER PRICES -0.5% M/M

MNI BRIEF: PBOC Wants SWIFT Improvements - Dep Gov Lu

MNI NBH WATCH: Hold Expected, December Projections In Focus

MNI BRIEF: China Grid Investment Up 21.1% YTD

CHINA PRESS: Banking Regional Disparities Widening - Report

EZ/UK Bond Supply Calendar: IT, SK, EU, BE, BoE APF on Monday

MNI: GERMANY SEP PRODUCER PRICES -1.4% Y/Y

MNI: US SEP TREASURY BUDGET $64.3B

CANADA: Politics Week: Trudeau Faces More Pressure To Resign

CANADA: Politics Week: Parliament Opens With Early Election Threats

AUSTRALIA: Albanese Lines Up Budget for May Election

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QT "can continue in the background for the next year" - Ramsden

BOE
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  • Bailey: we are moving to a system where level of reserves will be demand-driven - different to the Fed who want "ample reserves." Don't know when we hit that - think we might get to equilibrium later next year, but don't know. Second Q: what is right set of assets for the BOE to have on the balance sheet to manage these reserves?
  • Ramsden adds on the immediate decision being made in September. Will be based on 3 principles since QT began: Bank Rate is the active tool with QT in the background. Won't do QT if it disturbs functioning of financial market. And want it to be predictable. Those principles still apply - will have reduced the balance sheet by over GBP200bln from peak. Central estimate is that this has had about a 0.1ppt increase on long-term interest rates - it could be as high as 0.2ppt. But QT can continue in the background for the next year in line with these principles.
  • Note that Ramsden made no mention of whether "continuing in the background" referred to active sales continuing or not.
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  • Bailey: we are moving to a system where level of reserves will be demand-driven - different to the Fed who want "ample reserves." Don't know when we hit that - think we might get to equilibrium later next year, but don't know. Second Q: what is right set of assets for the BOE to have on the balance sheet to manage these reserves?
  • Ramsden adds on the immediate decision being made in September. Will be based on 3 principles since QT began: Bank Rate is the active tool with QT in the background. Won't do QT if it disturbs functioning of financial market. And want it to be predictable. Those principles still apply - will have reduced the balance sheet by over GBP200bln from peak. Central estimate is that this has had about a 0.1ppt increase on long-term interest rates - it could be as high as 0.2ppt. But QT can continue in the background for the next year in line with these principles.
  • Note that Ramsden made no mention of whether "continuing in the background" referred to active sales continuing or not.