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GoCs Hold Rare Underperformance To Tsys

CANADA
  • GoC yields are currently +5-12bps with underperformance to Tsys extending ever since the open, and across 2-10Y tenors in pullback from the blowout in negative Can-US yield differentials since the US CPI beat/CAD CPI miss (albeit only to 2Y -42bps and 10Y -63bps).
  • The GoC sell-off has lagged EU FI and especially Gilts, although an earlier MNI interview with the Uni of Calgary professor Tombe on the BoC tackling inflation even if it triggers a recession lends support to 2Y yields just off fresh cycle highs of 3.90% and temporarily pausing the day's climb in 2s10s to -54bps.

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