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GoCs Bull Flatten

CANADA
  • GoCs see an extension of a bull flattening on open, with front-end yields -1bp and circa -3.5bps further out to leave yields close to yesterday’s lows after weak US data.
  • Can-US yield differentials have been trimmed from recent highs but still sit positive at 4-4.5bps for 2Y and 10Y.
  • The mild firming in both GoCs and USTs on the day ties in with the steady rise in rates, with BAX contracts edging higher in early trade as they track Eurodollars in absence of local drivers, with growth implications of upcoming US durable goods perhaps the next driver after a swathe of disappointing US data yesterday.

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