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Circa 100bps Of Cuts For 2024 Priced Ahead Of BoC

CANADA
  • Ahead of the BoC decision at 0945ET (which includes decision/opening presser statements and MPR), GoCs only marginally outperform Tsys, with 2Y GoCs -4bps (Tsys -3.5bps) and the Can-US 2YY differential at -29bps.
  • BoC-dated OIS puts 16bps of cumulative cuts with the April, with the first cut in June (29bp cumulative) on the way to ~100bp of cuts for 2024. The latter has increased significantly since early last week owing to stubborn core inflation and large spillover from Fedspeak and Waller in particular.
  • USDCAD has pushed lower with broader USD weakness, touching a low of 1.3431 with support at 1.3420 (20-day EMA) after which lies 1.3343 (Jan 12 low). Resistance meanwhile is seen at 1.3542 (Jan 17 high).

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