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GoCs Underperform Rally With Broader Growth Fears

CANADA
  • GoCs follow Tsys higher this morning in response to further contraction fears coming out of Europe but see modest underperformance at the front-end to belly vs Tsys (2YY -3.8bps vs -5.2bps, 5YY -5.8bps vs -6.8bps).
  • An elevated terms of trade has been boosting Canadian growth although a further fall in oil so far today could be behind the only modest underperformance.
  • Both Canadian retail sales (0830ET) and the US PMI (0945ET) are likely of note.

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