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Front End GoCs Consolidate Reversal Of BoC Downshift Rally

CANADA
  • GoCs see a fading cheapening in spillover from Germany more than doubling net debt next year.
  • 2Y GoCs see slight underperformance to Tsys (+0.3bp vs -0.6bp) which at 4.182% are 1bp off the high from the initial reaction to US payrolls and notably the strength in Canadian employment having returned to levels prior to the BoC’s surprise 50bp downshift on Oct 26 (but still off Oct 20-21 cycle highs of ~4.30%).

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