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Market Snapshot With CAD CPI In Spotlight

CANADA
  • GoCs have pushed 4.5-5bp richer ahead of CPI, following the bid in Treasuries but also with some growing outperformance since the open (Tsys 3-3.5bp richer).
  • Focusing on 2Y yield differentials, the Can-US of -47bps holds its lift from below -50bp levels seen before Wednesday’s FOMC, including a recent low of -58bp on Dec 8.
  • BoC-dated OIS shows a 5bp of cuts priced for January (still a second CPI report to come before then) and a cumulative 16bp of cuts for March.
  • USDCAD at 1.338 remains at the higher end of yesterday’s range having topped out at 1.3409. Resistance is seen at 1.3520 (Dec 14 high) but the trend signals remain bearish with support at 1.3320 (Aug 4 low).

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