MNI: PBOC Net Drains CNY203.9 Bln Via OMO Wednesday

MNI: PBOC Sets Yuan Parity Higher At 7.1358 Weds; -0.98% Y/Y

CHINA PBOC CONDUCTS CNY66.1 BILLION VIA 7-DAY REVERSE REPOS WEDS

CHINA SETS YUAN CENTRAL PARITY AT 7.1358 WEDS VS 7.1334

MNI BRIEF: China Wants U.S. Firms To Deepen Investment

MNI China Daily Summary: Tuesday, July 23

GERMANY AUG GFK CONS CLIMATE -18.4 (-21.0 F'CAST; -21.6 JULY)

INDON Curve Out-Performs As Investors See Rate Hikes Ending

MNI: UK APR-JUN MEDIAN PAY AWARDS +4.9% :Brightmine

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

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

What bucket sizes could the BOE use for active gilt sales?

BOE
  • The Bank of England confirmed in a statement at 18:00BST yesterday evening that it would commence active gilt sales on 1 November.
  • The prior official guidance from the Bank (announced at the same time as the temporary purchases were launched) had been that gilt sales would begin the W/C 31 October.
  • Under the original plans we would have seen three operations each fortnight with GBP580mln of sales of each of shorts (3-7 year), mediums (7-20 year) and longs (20+ years).
  • The Bank has confirmed that there will be no sales of long-dated gilts in Q4-22.
  • It stated that sales would be "a similar size and frequency as had been previously announced, with any shortfall as a result of the earlier postponement relative to its previous sales plan incorporated into sales in subsequent quarters."
  • To us this reads as though the bucket size will be between the originally-proposed GBP580mln but below GBP870mln.
  • Based on yesterday's closing prices and the average discount to the initial purchase price in both the short-dated and medium-dated buckets, GBP580mln buckets for 24 operations (i.e. a whole year) would see the Bank's balance sheet fall by GBP35bln. This is only slightly smaller than the GBP40-45bln total reduction in the balance sheet set out by the MPC through active gilt sales.
  • The MNI Markets team would expect that given the communication surrounding similar sizes and catch up in subsequent quarters, that bucket sizes will be set between GBP580mln-750mln (with the latter consistent with a GBP45bln reduction in the balance sheet through active gilt sales).
  • The BOE will announce the full details of this quarter's sales tomorrow at 18:00BST.
HomepageBulletMarketsFixed Income BulletsForeign Exchange Bullets

To read the full story

Close

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.