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CAD FI Pares Losses On June Cut Within Realm Of Possibilities

CANADA
  • BoC’s Macklem saying a June cut is “within the realm of possibilities” when asked if the door is open to a cut was the main point from the press conference Q&A.
  • It has seen GoCs pare a small part of their CPI-induced losses. 2Y yields are 4.7bps lower since the start of the presser (vs 2.7bps for Tsys), with the 2Y differential -8bps on the day at -63.5bps.
  • BoC-dated OIS sits at a cumulative ~16bp of cuts for June, whilst CORH4/Z4 is at -70bps vs -66bp before the Q&A and -78bps before US CPI.
  • USDCAD has continued a push higher, most recently touching 1.3695. It’s through resistance at 1.3661 (Nov 27, 2023 high) and next eyes 1.3729 (Nov 22, 2023 high).

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