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GoC Belly Sees Bulk of BoC Survey Impact, USDCAD Little Changed

CANADA
  • The sharpest drop in business sentiment since 2020 (from 4.9 to 1.7) and a majority of firms seeing a recession as likely in the next year leads the market reaction to the BOS/CSCE surveys.
  • GoCs have rallied 2-4bps since, leaving 5-10Y tenors driving moves on the day at circa -11bps vs -6.5/-4.5bps for Tsys as GoCs fade the most recent cheapening. 2s10s -4bp to -71bps, close to recent post-1990 low of circa -75bps.
  • Little net impact on USDCAD, hovering near levels seen after the strong US open, currently 1.3735 off session lows of 1.3715 vs support at 1.3704.

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