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Market Snapshot Ahead Of BoC Decision

CANADA
  • GoCs trade 5.5-9.5bp cheaper, bear steepening. 2s underperform Tsys (+5.5bps vs +1.5bps) to offset yesterday’s equally large outperformance. CORRA OIS pricing about 50/50 odds of a cumulative hike for January.
  • CAN-US yield differentials back with recent ranges for 2s (-32bps) but still near extremes for 10s (-81bps).
  • USDCAD has lifted back within 10 pips of fresh week highs of 1.3784 under renewed downward pressure in equities. It earlier failed a test of the bull trigger at 1.3786 (Oct 5 high), clearance of which would confirm a resumption of the uptrend and open 1.3862 (Mar 10 high).

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