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CAD Rates Holding Reasonable Rally After Mixed CPI, Other Data

CANADA
  • BAX futures are holding a modest to solid rally on a day with mixed data, headlined by a mixed CPI report along with stronger housing starts but softer cost pressures.
  • The front Sep’23 trades +0.01, building to +0.02 Dec’23, +0.04 Jun’24 and +0.07 Dec’24. It sees the Sep’23 – Dec’24 spread widen from -89bps to -95bps for one of the higher readings in absolute terms post US CPI and the BoC hiking on Jul 12 vs -65bps before then.
  • As for near-term meetings, BoC-dated CORRA OIS has dipped 1bp to year-end, with 8bps priced for Sep 6 and building to a cumulative 16bp of hikes by year-end.

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