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BA Yields Dip, Further Housing Cooling

CANADA
  • BA yields see a continuation of yesterday’s decline in yields (BAZ -4bps, BAZ3 -6bps) with reasonable front rate outperformance to the US (EDZ2 +0.5bps).
  • Limited local drivers but housing slowdown potentially at play, with Vancouver showing further signs of rapid cooling with prices -2% M/M in Sept and -8.5% over six months as inventory builds, with Canadian household indebtedness gaining more attention as the hiking cycle matures.
  • BOC-dated OIS shows a 41bp hike for the Oct 26 BoC with a cumulative circa 60bp to year-end at 3.84%.

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