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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
- As noted in the MNI BoC Preview (see here), we don’t expect any changes in balance sheet policy to be formally announced with this decision, with the Bank happy to continue its passive run-off approach.
- It has previously seen settlement balances reaching a target range of C$20-60bn “sometime in 2025” and the recent plateauing at roughly C$100-130bn levels suggests this is unlikely to come earlier.
- However, expect further questions on it in the press conference which could provide clues to the likelihood of a further adjustment. Pressures are clearly being felt in with the CORRA to overnight rate spread having climbed to +5bps, close to +7bp recent peak from late January and matching the sustained peak seen through January and February.
- It has previously linked these overnight pressures to factors other than a need to reduce the pace of QT. The reintroduction of Overnight Repo operations and Receiver General morning auctions helped these pressures dissipate ahead of the March BoC meeting.
- However, increasing the dealer and round limits for the former, effective July 15, has done little to abate this latest pressure. Overnight repo usage has just recently re-started, with C$9.2bn on Jul 17, C$9.7bn on Jul 18, and new recent highs of C$12.7bn on Jul 19 and C$13.4bn on Jul 22.
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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