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Front-End GoCs Extend Yesterday's Sell-Off

  • GoCs begin to chip away at what small rally there had been at open, with 2YY +1.1bp after +18bp yesterday, setting fresh post-2007 highs.
  • About half the move was the net reaction to CPI before rising further on global factors, which also lifted 10YY almost 20bps. 2s10s keep in the recent range at a historically inverted -66bps whilst Can-US yield differentials remain heavily negative (2Y -38bps off latest low of -49bps).
  • Canadian house prices and a 3Y auction lead locally although also see Philly Fed, jobless claims and existing home sales in the US.

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