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CANADA: Can-US 2YY Differential Within Range, Macklem Speaks Tomorrow

CANADA
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  • GoCs have seen a sizeable reversal of earlier selling pressures, with 2Y yields ~4bps below session highs.
  • GoC yields are 2.5bp (2s) to 1.5bp (30s) lower today, with the Can-US 2Y yield differential 0.5bp lower on the day to remain within recent ranges at -67bps - see below chart.
  • We have mentioned today another strong wage settlement (15% over two years) and a sizeable uplift in consumer confidence, but moves appear US-led after selling off with strong price components in the flash PMIs for about 30 minutes before more than reversing the move mainly on geopolitics risk-off.
  • BoC-dated OIS has been unaffected, pricing a 38bp cut for Oct 23 as the market continues to weigh an upsizing after three consecutive 25bp cuts.
  • Tomorrow sees flash mfg sales for August at 0830ET after a solid retail sales advance last week. It’s followed by BoC Gov. Macklem in a fireside chat at 1310ET - text will be made available at 1255ET but, unusually, seemingly with no media lock-up for it. 
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  • GoCs have seen a sizeable reversal of earlier selling pressures, with 2Y yields ~4bps below session highs.
  • GoC yields are 2.5bp (2s) to 1.5bp (30s) lower today, with the Can-US 2Y yield differential 0.5bp lower on the day to remain within recent ranges at -67bps - see below chart.
  • We have mentioned today another strong wage settlement (15% over two years) and a sizeable uplift in consumer confidence, but moves appear US-led after selling off with strong price components in the flash PMIs for about 30 minutes before more than reversing the move mainly on geopolitics risk-off.
  • BoC-dated OIS has been unaffected, pricing a 38bp cut for Oct 23 as the market continues to weigh an upsizing after three consecutive 25bp cuts.
  • Tomorrow sees flash mfg sales for August at 0830ET after a solid retail sales advance last week. It’s followed by BoC Gov. Macklem in a fireside chat at 1310ET - text will be made available at 1255ET but, unusually, seemingly with no media lock-up for it.