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First BoC Cut Shifts Out To July

CANADA
  • GoC yields have drifted higher with Treasuries in recent trading, maintaining earlier underperformance sparked by stronger than expected retail sales (even if there were notable caveats in the underlying mix for September).
  • The front end has led the post-data move, with 2Y yields 4.5bp higher for 6bp higher on the day.
  • In rates space, CORRA futures trade up 7.5 ticks cheaper through most 2024 contracts, pushing BAZ3/Z4 to -70.5bps for its highest since Nov 10 before there was sizeable dovish spillover from softer than expected US CPI.
  • The move has come with the first BoC cut shift out from June to July.

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