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Canada: Larger Hikes Being Priced In

STIR FUTURES
  • BAX futures have seen further declines, led by Dec whites and front reds down 6 ticks on the day.
  • Around half of the came prior to Bullard’s continued hawkishness, which helped to continue momentum.
  • The rate path remains heavily front-loaded, getting close to 7x25bp hikes crudely priced for 2022.
  • Further out, the Z2-Z3 spread stays within the recent 40-45bp range before inversion through the greens.
  • The next significant Canadian drivers are likely Jan CPI (0830ET) and BoC’s Lane (1330ET) on Wed.


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