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BA Curve Cranks Up Inversion

CANADA
  • Front-dated BA contracts are little changed on the day after yields fell more than 20bps yesterday, but that hasn’t stopped a further significant rally in late 2023 and 2024 contracts (BAZ3 -12bp, BAM4 -16bp).
  • Much of this is tracking a rally in US rates but with potential additional local factors from the CFIB business barometer missing early this morning and a modest further rolling over in the ratio of vacancies to unemployed.
  • It sees the curve become further inverted, more running at -50bps for BAZ2/BAZ3 having been circa -35bps prior to the BoC.

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