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GoCs Fade Latest US Sell-Off With Another Hike Near Fully Priced

CANADA
  • GoCs have pivoted from under- to outperforming Tsys with 2YY +2bps (+4bp 2Y Tsys) and 10YY +5bps (+6.5bps 10Y Tsys) as they fail to keep pace with the latest sell-off in Treasuries with a notable push higher in real yields.
  • New home prices were on the soft side although it could just be a function of unwillingness to price much more in the short end, with BoC-dated CORRA OIS pushing higher on the day to +10.5bp for the Sep 6 decision and +24bp for year-end.
  • The next notable domestic data are retail sales on Wed before next week’s Q2 GDP.

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