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GoC/BAX Yields Surge With Fedspeak

CANADA
  • After a sizeable bull flattening at the start of the session in a catch-up from yesterday’s Civic Holiday and Taiwan tensions, GoC yields have surged higher today with 2YY +12.7bps, 5YY +13.3bps and 10YY +10bps from Friday’s close.
  • It leaves 2s5s relatively little changed at -34bps whilst 2s10s still flatten from to -38bps but are off intraday lows of -48bps that had cleared Mar'20 lows for the most inverted since 1990.
  • The move comes as coordinated Fedspeak jawboned the rate path higher whilst downplaying the significance of a technical GDP recession after last week’s Q2 contraction.
  • Similarly, BAX yields currently sit 11.5bps higher for Dec’22 and 18bps higher for Dec’23, in a notable unwinding of inversion to -68bps for 2023 from the -80.5bps earlier this morning.
  • That is however still heavily inverted and, for the first time this cycle, more so than in the Eurodollars equivalent.

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  • After a sizeable bull flattening at the start of the session in a catch-up from yesterday’s Civic Holiday and Taiwan tensions, GoC yields have surged higher today with 2YY +12.7bps, 5YY +13.3bps and 10YY +10bps from Friday’s close.
  • It leaves 2s5s relatively little changed at -34bps whilst 2s10s still flatten from to -38bps but are off intraday lows of -48bps that had cleared Mar'20 lows for the most inverted since 1990.
  • The move comes as coordinated Fedspeak jawboned the rate path higher whilst downplaying the significance of a technical GDP recession after last week’s Q2 contraction.
  • Similarly, BAX yields currently sit 11.5bps higher for Dec’22 and 18bps higher for Dec’23, in a notable unwinding of inversion to -68bps for 2023 from the -80.5bps earlier this morning.
  • That is however still heavily inverted and, for the first time this cycle, more so than in the Eurodollars equivalent.