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Markets Undecided On 25/50bp BoC Hike Ahead of More Pivotal Week

CANADA
  • BAX futures hold little changed, rallying 1.5-2bps in 1H23 and cheapening 1bp further out into 2024.
  • The result is implied yields continue to peak in the Mar’23 at a level consistent with a policy rate a little above 4.25%, whilst BAH3/BAZ3 inversion is narrowed slightly to -0.50 in a continuation of the trend seen since a low of -0.65 on Nov 16 after CAD CPI came in as expected.
  • Next week is likely more pivotal ahead of the Dec 7 BoC with CAD GDP and labour reports plus Powell and NFPs.

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