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Can-US Yield Differentials Heavily Depressed Ahead of Macklem and 2Y Auction

CANADA
  • GoCs marginally outperform Treasuries, with 2-10Y tenors 5-6bps cheaper and the 30Y 4bp cheaper. It means no notable change in depressed CAN-US yield differentials, with the 10Y still of note at extremes of -86bps.
  • In recent headlines, Unifor has reached a tentative agreement with Stellantis, in a quick reversal after workers went on strike having failed to reach a new contract by a Sunday night deadline.
  • BoC Governor Macklem and Sr Dep Gov Rogers headline today’s docket later in the session, in front of the House finance committee with an opening statement released 1530ET. It will be a long appearance from 1530-1800ET, followed by the Senate’s turn on Wednesday.
  • Additional FI interest earlier in the session with the 2Y GoC auction at 1200ET, after the Oct 4 2Y saw a return to relatively low bid-to-covers at 2.239.

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