FED'S BARKIN: LOOKING FOR MORE EVIDENCE OF INFLATION'S DECLINE

BARKIN: FED SHOULD ACT DELIBERATELY, KEEP CLOSE EYE ON ECONOMY

MNI BRIEF: China Equip't Renewal Policy Includes Foreign Firms

MNI China Daily Summary: Wednesday, July 17

MNI China Press Digest July 17:  Investment, LPR, H2 Priority

MNI: PBOC Net Injects CNY268 Bln Via OMO Wed; Rates Unchanged

US Treasury Auction Calendar

Broad-based Softening In June Underlying Inflation Metrics

EZ/UK Bond Supply Calendar: Spain, France Auction on Thursday

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

July Cut Odds Shored Up On CPI But Less Reaction Further Out

CANADA
Homepagemarkets-real-timeBulletMarketsFixed Income BulletsForeign Exchange Bullets Bank of Canada Market News
  • With some of the dust settling on a somewhat inline Canadian CPI report, but one that ruled out a more hawkish surprise to derail a back-to-back cut, BoC-dated OIS has lifted to 22-23bp of cuts for Wednesday’s decision vs closer to 20bps prior.
  • However, with the latest run rate firming slightly more than some expected in June, September cut odds have actually been trimmed a little to a cumulative 25bps: the Bank is seen cutting again in July before moving back to the sidelines to observe.
  • Stronger US retail sales hitting also helps see very little net reaction in the 3M CORRA strip, with 63bp of cuts in 2024 contracts and 148bp of cumulative cuts by end-2025 (from 150bp prior).
  • It’s more a relative play, for instance with Can-US 2Y yield differential falling 4bps since the collection of 0830ET data to -69.5bps as they fall further back to recent ranges after Friday’s close at -62.7bps was the highest since mid-May.
  • USDCAD has touched 1.3707, clearing the overnight high but still off resistance seen at 1.3755 (Jul 2 high) before 1.3792 (Jun 11 high).
  • There’s a solid $910m at 1.3600 expiring today but also heavy cumulative expiry of $2.0bn through 1.3800-1.3810.

197 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • With some of the dust settling on a somewhat inline Canadian CPI report, but one that ruled out a more hawkish surprise to derail a back-to-back cut, BoC-dated OIS has lifted to 22-23bp of cuts for Wednesday’s decision vs closer to 20bps prior.
  • However, with the latest run rate firming slightly more than some expected in June, September cut odds have actually been trimmed a little to a cumulative 25bps: the Bank is seen cutting again in July before moving back to the sidelines to observe.
  • Stronger US retail sales hitting also helps see very little net reaction in the 3M CORRA strip, with 63bp of cuts in 2024 contracts and 148bp of cumulative cuts by end-2025 (from 150bp prior).
  • It’s more a relative play, for instance with Can-US 2Y yield differential falling 4bps since the collection of 0830ET data to -69.5bps as they fall further back to recent ranges after Friday’s close at -62.7bps was the highest since mid-May.
  • USDCAD has touched 1.3707, clearing the overnight high but still off resistance seen at 1.3755 (Jul 2 high) before 1.3792 (Jun 11 high).
  • There’s a solid $910m at 1.3600 expiring today but also heavy cumulative expiry of $2.0bn through 1.3800-1.3810.