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CPI Sees CAD Lead G10 FX and GoCs Underperform Further

CANADA
  • The upshot of strong momentum in core inflation and a sizeable beat for headline CPI plus US core retail sales beating, is CAD now leading G10 FX gains on the day and a second day of decent GoC underperformance to Tsys.
  • USDCAD pushes new lows of 1.3415 (-0.4%), 33 pips through the earlier low but still above more notable support at 1.3363 (May 11 low).
  • GoC underperformance extends further and is concentrated in the front end to belly with GoC 2Y-5Y yields +6.5-7bps vs Tsy 2-5Y yields +2.5bps.

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