August 08, 2022 14:17 GMT
- GoCs are reversing the early session cheapening to leave them near a richer open, more so at the long end for a solid bull flattening with 2YY -3.5bps and 10YY -6bps.
- Long end yields have fully unwound Friday’s shift higher when a storming US payrolls report was offset somewhat by weaker growth implications from a second monthly contraction in Canadian employment.
- The combination pushes 2s5s and 2s10s to new flats at -43bps and -53bps, fresh post-1990 lows.
- With only limited further outperformance to Treasuries today, Can-US yield differentials largely keep to recent lows with the 2Y +0.5bps and 10Y -9bps.
GoC 2s10s (white) and 2s5s (pink)Source: Bloomberg