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CAD Outperforming Most Peers With Macklem Ahead

CANADA
  • USDCAD is off a session high of 1.3765 but at 1.3744 still sees a solid 0.3% climb on the day after stronger than expected US data.
  • USDCAD has lifted further off support at 1.3681 (50-day EMA), but is still some way off resistance at 1.3855 (Nov 10 high).
  • BoC commentary is next up, with Macklem’s speech on “The cost of high inflation” to be released at 1130ET before live remarks start 1145ET.
  • USD strength sees CAD outperform most other majors on the day with firmer equities at least partly helping offset heavy declines in crude front futures (WTI -4%).
  • GoC yields have been dragged higher by Tsys but still outperform across the curve, which pushes CAN-US yield differentials back to -50bps for the 2Y (lows since March) and -76bps for the 10Y (off lows that bottomed out closer to -85bps but still sustaining historically low levels over the past month).

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