MNI: PBOC Net Drains CNY111.2 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1307 Weds; +2.41% Y/Y

CHINA PBOC CONDUCTS CNY258 BILLION VIA 7-DAY REVERSE REPOS WEDS

CHINA SETS YUAN CENTRAL PARITY AT 7.1307 WEDS VS 7.1325

China Repo Rates Rise On Tuesday

MNI: PBOC Net Drains CNY236.6 Bln via OMO Tuesday

August Exports On Solid Footing,  Country Detail Shows Double Digit Y/Y Pace

MNI: JAPAN JULY EXPORTS +10.3% Y/Y; JUNE +5.4%

MNI: UK MAY-JUL MEDIAN PAY AWARDS +4.5% :Brightmine

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

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Sellside Reactions To BoC Statement

CANADA
  • CIBC: The threat to act “more forcefully if needed” with no counterbalancing hint of a potential need to slow the pace of hikes runs counter to our forecast of slowing to a 25bp hike in Sep and then a pause before a final 25bp to 2.5% in early 2023.
  • ING see 50bp hikes in Jul and Sep and a 3.5% rate in early 2023, with a strong likelihood that the BoC will then start to move back towards the 2-3% range in 2H23. They call for USDCAD at 1.22 year-end.
  • National: While still not their base case, the odds of a 75bp hike in July are now non-trivial, with just one additional CPI report before then. They had expected slowing to 25bp hikes in Sep to 2.5% before year-end but the level of concern today suggests that outsized moves might continue for longer, making outright restrictive policy more likely.
  • RBC: The inclusion of being “prepared to act more forcefully if needed” is not new language for the BoC but it’s new to the policy statement. The tone reinforced their call for another 50bp hike in July but this doesn’t sound like a central bank planning to pause at 2% - RBC continue to look for 25bp hikes in Sep and Oct to a terminal 2.5%.
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