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BA Yields See Modest Fade Of GoC Rally

CANADA
  • BA yields are currently 1-2bps lower today as they fade a larger 4bp rally in 2Y GoCs.
  • As such the curve is little changed, with terminal yields seen through 1H23 at a level roughly implying a policy rate approaching 4.5% (i.e. 75bp of hikes to come) with OIS suggesting a toss up between a 25bp or 50bp hike at the Dec 7 meeting.
  • The peak yield nudges into the BAH3 at 4.91%, falling just over 50bps in the following four quarters.

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