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CANADA: Can-US Yield Differentials Extend Lift Off Recent Lows

CANADA
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  • BoC-dated OIS continues to show circa 33bp of cuts for the Dec 11 meeting, keeping to similar figures seen after yesterday’s stronger-than-expected CPI release vs ~36bp prior.
  • Can-US yield differentials lift a little higher on the day though, currently at session highs of -105bp from -107bp at yesterday’s close. It compares with -110bp pre-CAD CPI and a fresh multi-decade low close of -118bp earlier in the month (last lower 1997).
  • Analysts that we have seen are still split down the middle over a second 50bp cut or a reversion to a 25bp clip pace in Dec.
  • This week’s IPPI (tomorrow, Nov 21) and especially retail sales data (Nov 22) could see some reaction, but main macro drivers are still to come with GDP for Q3 (Nov 29) and the jobs report for Nov (Dec 6).
  • BoC Dep Gov Mendes is set to speak before those major releases on Nov 26, with "Inflation at 2%: the role of monetary policy going forward".
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  • BoC-dated OIS continues to show circa 33bp of cuts for the Dec 11 meeting, keeping to similar figures seen after yesterday’s stronger-than-expected CPI release vs ~36bp prior.
  • Can-US yield differentials lift a little higher on the day though, currently at session highs of -105bp from -107bp at yesterday’s close. It compares with -110bp pre-CAD CPI and a fresh multi-decade low close of -118bp earlier in the month (last lower 1997).
  • Analysts that we have seen are still split down the middle over a second 50bp cut or a reversion to a 25bp clip pace in Dec.
  • This week’s IPPI (tomorrow, Nov 21) and especially retail sales data (Nov 22) could see some reaction, but main macro drivers are still to come with GDP for Q3 (Nov 29) and the jobs report for Nov (Dec 6).
  • BoC Dep Gov Mendes is set to speak before those major releases on Nov 26, with "Inflation at 2%: the role of monetary policy going forward".