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GoC Yields Briefly Lower In Budget Reaction

CANADA
  • 10Y GoCs rally 1.5bps on the embargoed release of the Budget only to give it back almost immediately.
  • Yields sit 1.5bps off earlier highs, which came 30mins before the release, but remain 6bps higher on the day and close to recent highs.
  • On issuance, bond sales are seen at C$212B in FY 2022/23 from C$255B in the year just gone, sitting roughly between sell side estimates seen beforehand of C$200B-C$238B.
  • The government aims for 35% of bond sales to be 10y+ maturities, lower than the 42% seen by TD beforehand, for example, in a sharper than expected move back towards pre-pandemic levels.

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