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Trend Needle Points North

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Bonds Near Highs, Yield Curves Flatter

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BAX Yields Tumble And Inversion Accelerates

CANADA
  • Mirroring the risk-off drive lower in GoC yields, BAX implied yields are down 16-17bps through the 2023 and into 2024.
  • With the Dec’22 contract down only -9bps in comparison, yields are still seen peaking at an elevated 3.75% (36bps higher than after the last BoC decision on Jun 1) but the curve is becoming increasingly inverted thereafter.
  • Whilst still a long way from the -75bps in the Eurodollars equivalent, BAZ2/BAZ3 shows 40bps of cuts through 2023, driving the Dec’23 12bps lower than after the Jun BoC.

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  • Mirroring the risk-off drive lower in GoC yields, BAX implied yields are down 16-17bps through the 2023 and into 2024.
  • With the Dec’22 contract down only -9bps in comparison, yields are still seen peaking at an elevated 3.75% (36bps higher than after the last BoC decision on Jun 1) but the curve is becoming increasingly inverted thereafter.
  • Whilst still a long way from the -75bps in the Eurodollars equivalent, BAZ2/BAZ3 shows 40bps of cuts through 2023, driving the Dec’23 12bps lower than after the Jun BoC.