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FI Pares Earlier Gains But Still Leads Reaction To BoC Surveys

CANADA
  • With volumes thinning, GoCs have pared earlier gains seen with the BoC surveys but still hold a sizeable rally on the day. 2YY -8bps and 5YY -4.5bps as yields continue to soften ahead of the BoC on Jan 25 (21bp hike priced).
  • USDCAD meanwhile has recently poked higher to 1.3404 but has shown very little reaction to today’s data. It’s just above the extremely narrow ~15 pip range through the US session but remains within a still narrow range for the day with the US out.
  • CPI inflation for Dec is in focus tomorrow with headline seen easing 0.4pps and key core measures 0.1pps in Y/Y terms.

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