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GoC Rally Emerges As BoC Surveys Digested

CANADA
  • After initially limited reaction, GoCs have extended a rally as the BoC’s business and consumer surveys are digested, with some reasonable progress in inflation expectations in both reports likely helping the move even if levels are still relatively elevated.
  • 2Y and 5Y yields now sit 2.5bps lower since the reports for -6/-6.5bps on the day.
  • With 2Y Tsy yields +1.5bp on the day, the Can-US yield differential widens a sizeable 7.5bps on the day to -27bps, now from -13bps prior to CPI.

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