Daily Commentary BY THE CURVE TEAM –

Daily Insights – Bank of Canada Hold

9 December, 2021

Bank of Canada Hold

  • The Bank of Canada held rates at 0.25% overnight.
  • Like the Fed, they also believe inflation is persistent.
  • Markets have priced in a rate hike by March 2022.
  • They have already ended their QE programme.

BOQ FRN

  • BOQ issued $275 million of a one-year FRN at +27.
  • As a comparison, one year NCDs are available at around +20 over one-year swap.
  • With the one-year swap rate over 0.30%, it results in a yield above 0.50%.
  • For the FRN to match the yield of a one-year NCD, BBSW will have to rise significantly over the next year.

Josh Stewart

Associate - Money Markets