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BoC Leads The $-Bloc Into An Easing Cycle

STIR

STIR markets within the $-bloc have shown varied performances over the past two weeks. The US and Canada have outperformed, softening by 12-13bps in year-end expectations, while Australia and NZ remain virtually unchanged.

  • This week's key event was the BoC Policy Decision on Wednesday, which delivered the first rate cut in the $-bloc for this cycle.
  • (MNI) BoC Governor Tiff Macklem lowered the key lending rate for the first time in four years on Wednesday, moving ahead of G7 peers and saying measured further cuts are likely needed amid growing confidence that restrictive policy is returning inflation to target. (See link)
  • The next policy meetings for the remainder of the $-bloc are FOMC (June 12), RBA (June 18), and RBNZ (July 10). Market pricing assigns a low probability of any moves at these meetings.


Figure 1: $-Bloc STIR: Terminal Rate Expectations & ’24 Pricing



Source: MNI – Market News / Bloomberg

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