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Bank Earnings Misses Weigh On GoC Yields

CANADA
  • GoCs outperform Tsys with yields 2.5-4bps lower across the curve. The 2Y comparison is muddied by yesterday’s new 2Y Tsy but cleaner with 5Y -3.5bps vs -1.5bps for Tsy and 10Y -4bps vs -2.5bps.
  • Bank earnings misses are perhaps a factor after yesterday’s underperformance, with BMO (Q2 adj EPS 2.93 vs est 3.21) and Scotia (Q2 adj EPS 1.70 vs est 1.76). The largest two by market cap, RBC and TD, follow tomorrow.
  • 10Y supply highlights a light domestic docket, with GoCs otherwise likely at the mercy of US debt ceiling headlines and Fedspeak.

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