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BAX Implied Yields Shifting Back Towards Highs

CANADA
  • Mirroring the move higher in front-end GoC yields, BAX futures implied yields are 3-3.5bps higher across most of the curve.
  • This takes them back to within ~5bps of previous highs from two weeks ago and it approaches a crudely implied terminal rate of circa 3.25%.
  • BoC Senior Dep Gov Rogers is due to speak on BoC independence later but if there is any mon pol discussion it would likely repeat that ready to act forcefully if needed with a 50bp hike considered for Jun 1 and that house price growth is unsustainable. Watch for any reaction to last week’s GDP being stronger than BoC forecasts.

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