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BAX Rate Path Cranks Higher For Tenth Day Running

CANADA
  • Set for the tenth consecutive day of increases, BAX implied yields are being led by 8bp increases in 2023 contracts.
  • It leaves the Mar’23 up 75bps from the recent low on May 25, 43bps of which have come since after the reaction to the first round of BoC hawkishness with the decision statement last week.
  • There’s risk of some retracement from these extended levels tomorrow if Gov Macklem, speaking after the Bank’s Financial System Review, puts much emphasis on growing financial risks. That could be especially so if linked to the slowdown in the housing sector after the focus at the policy decision was almost completely on inflation risks.

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