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Front Rates Underperform US Ahead Of CAD GDP

CANADA
  • GoCs have faded the rally in Treasuries over the cast couple hours, especially at the front-end, which sees the Can-US 2Y differential increase 2bp on the day to -45bps (10Y only increases 0.5bps to -75bps).
  • Keeping to the front end, 3M CORRA futures unwind some recent disinversion, with the CORH4/Z4 dipping 3bps to -74bps.
  • Today’s data saw job vacancies slowly ease in Dec to 637k from 653k and a smaller than expected current account deficit in Q4, whilst US domestic demand was stronger than overall GDP revisions suggested.
  • Tomorrow sees CAD GDP for the last major local release ahead of Wednesday’s BoC decision, with Q4 productivity landing 75mins ahead of the rate announcement with not enough time to factor into deliberations. There is also 2Y GoC supply whilst on the US side we see PCE and jobless claims.

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