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BoC Financial System Review Ahead

CANADA
  • The BoC releases its annual Financial System Review at 1000ET, followed by a press conference with Macklem and Rogers at 1100ET.
  • The April MPR noted that one of the three main upside risks to its inflation outlook was house prices rising sharply. Their base case includes a moderate increase in prices but noted potential to rise faster if easing financial conditions or population growth lead to stronger-than-expected demand for housing while supply remains constrained.
  • Ahead of the release, USDCAD has set new session lows at 1.3701, going against the bullish trend structure after yesterday’s push to 1.3763 took it closer to resistance at 1.3785 (Apr 30 high).
  • GoCs meanwhile underperform Tsys across the curve, with Can-US yield differentials 1.5-2bps higher across 2-10Y tenors. The 2Y at -63.3bps is currently at one of its highest levels for the past month.

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