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GoC Yields Struggle To Clear Recent Highs

CANADA
  • GoC yields are up +2.3-4.2bps today on Russian de-escalation but they struggle to clear recent highs from Fri/Mon.
  • Stronger than expected US PPI plus Canadian existing house prices jumping 2.9% M/M in Jan on extremely low supply (for a record 28% Y/Y) have made relatively little impact.
  • The next significant local drivers are Jan CPI (0830ET) and BoC’s Lane (1330ET) tomorrow. However, with more than 6 hikes already priced for 2022, it might take decent upside surprise to drive front end yields much higher from 2YY at 1.526%.

Canada govt bond yields. 2Y (green), 10Y (yellow), 2s10s (white)Source: Bloomberg

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