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BAX Rate Path Awaiting Fresh Triggers Ahead Of BOC

CANADA
  • BAX futures have reversed their 5 tick move higher and in mid-2023 contracts dip below where they started.
  • Ahead of next week’s BoC decision, the curve remains steep through immediate contracts but from 2023 onwards has gone full circle and is very similar to after the April meeting when the Bank shifted to a 50bp hike, i.e. particularly flat and crudely implying an overnight rate a little north of 2.75%.
  • Known local drivers aren’t scheduled until early next week now, but the US core PCE deflator and personal incomes/spending could have an impact tomorrow.

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