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Analyst Rate Cut Calls Pushing Against BAX Curve

CANADA
  • BAX implied yields are increasing inversion again (most pronounced BAM3 +2.5bps, BAM4 -2.5bps).
  • The curve continues to be more aligned to the higher for longer rhetoric than some growing calls from analysts though, with BAZ2/BAZ3 showing circa 25bp of cuts through 2023, although that's opened up from just 5-10bps before last week's BoC decision.
  • Recent views include the National view of 75bps of cuts to end-2023 whilst Desjardins saw 2x25bp cuts in Oct and Dec-2023 in the analyst survey earlier today.

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