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Adjustment From Interest Rate Increase May Not Be Completely Smooth - OSFI

CANADA
  • Canada's bank regulator OSFI said Tuesday that the jump in interest rates underpin the biggest risks to the financial system around weakness in domestic housing markets and a potential liquidity squeeze.
  • "Given the rapidity at which interest rates globally have increased, the risk has grown that such an adjustment may not be completely smooth," OSFI said in the second edition of its Annual Risk Outlook.
  • The report doesn't drive a fresh move in fixed income but does at least underpin a prior richening in GoCs, with yields currently 2.5-3.5bps lower on the day across the curve.

More: https://www.osfi-bsif.gc.ca/Documents/WET5/ARO/eng/2023/aro.html

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