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Can-US Yield Differentials Move A Little Further Off Multi-Year Lows

CANADA
  • GoCs have seen some further underperformance to Tsys today after pausing Friday, in a continuation away from multi-year lows for Can-US yield differentials after Tuesday’s soft Canadian core CPI metrics and hawkish Fedspeak.
  • With GoC yields 1.1-2.3bps higher on the day, yield differentials climb 1.5-2bps across 2- to 10-year tenors but are still historically depressed at -72bps for 2Y and -87bps for 10Y.
  • Input price inflation increased in today’s March release, with IPPI ex petroleum rising 0.8% M/M (strongest increase since Oct’22) and raw materials ex petroleum rising 2.6% M/M (strongest since Mar’22).
  • On the flipside, it’s a small survey but the Bloomberg Nanos weekly consumer survey saw a very deterioration in the perception of job security, with net security of 44.9% hitting its lowest since May 2020.
  • The US sees preliminary PMIs for April tomorrow whilst local focus is next on both retail sales and the BoC's Summary of Deliberations on Wed.

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