PrefBlog

The BoC published its minutes:

Until Wednesday, the Bank of Canada stood apart from peer central banks in not publishing some form of rate-decision meeting minutes. In a paper published last month, the bank’s own staff ranked it last among nine peer central banks for the depth and breadth of information released after rate announcements.

The bank had long maintained that its consensus form of decision-making made meeting minutes unnecessary. Governing council members don’t formally vote on monetary policy decisions, rather they offer opinions to the governor who has final decision-making authority. That is in contrast to the U.S. Federal Reserve, where monetary policy is decided based on votes by members of the Federal Open Market Committee.

Ultimately, the Bank of Canada changed its mind after a review of its transparency practices by the International Monetary Fund last year. The summary published Wednesday is considerably less detailed than Fed meeting minutes.

The document mostly reiterated comments made by Mr. Macklem in recent speeches and news conferences.

PerpetualDiscounts now yield 6.03%, equivalent to 7.84% interest at the standard equivalency factor of 1.3x. Long corporates yielded 4.89% on 2023-1-27 and since then the closing price has changed from 15.49 to 15.34, a decline of 97bp in price, with a Duration of 12.35 (BMO doesn’t specify whether this is Macaulay or Modified Duration; I will assume Modified) which implies an increase in yield of about 8bp since 1/27 to 4.97%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has narrowed slightly (and perhaps spuriously) to about 285bp from the 290bp reported February 1.

This entry was posted on Wednesday, February 8th, 2023 at 8:57 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.