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Front GoCs See Modest Re-Emergence Of Outperformance

CANADA
  • GoCs slowly extend front end outperformance to Tsys as the Can-US 2Y yield differential widens 2bps to almost -40bps (GoC -4.4bps, Tsy -2.3bps).
  • This still marks a notable narrowing from the -50bps to -60bps prior to the modestly stronger than expected Canadian CPI print on Dec 21.
  • The move coincides with TSX outperforming SPX (broadly flat vs -1%), with the latter weighed by specific names (Tesla and Apple particularly notable) plus lower yields offering a moderately more supportive macro backdrop despite falling oil prices weighing on energy sectors.

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