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First BoC Cut Seen Around July Ahead Of CPI

CANADA
  • USDCAD at ~1.357 is off an earlier high of 1.3581, still close to the bull trigger at 1.3606 (Feb 28 high) after which lies 1.3623 (Fibo retrace of Nov 1 – Dec 27 bear leg).
  • GoCs sit bull steeper, with yields 0-2bps lower, mostly tracking Tsys. The Can-US 2Y differential increased 4bps to -44bps yesterday, supported in part by a beat for IPPI inflation.
  • BoC-dated OIS is hovering with a first cut only just fully priced for the July decision (roughly 50/50 in June).
  • CORH4/Z4 is off yesterday’s -64.5bps (last seen briefly in mid-Fed and before that Nov’23) but still relatively elevated at -68.5bps (it was -88bps before the Mar 6 BoC).

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