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Modest Bear Flattening With CPI Eyed

CANADA
  • GoCs trade bear flatter (2YY +3.3bp, 10YY +1.8bp), with the long end seeing a greater reversal off lows from earlier in the session for a milder flattening in 2s10s on the day compared to that seen in Treasuries (-1.5bps vs -4bps).
  • GoC 2s10s at -104bps remains in last week’s range, with the large pulling back in the degree of credit tightening in today’s Q2 report having little trend impact.
  • CAD CPI is in focus tomorrow though with potential for a moderation in the BoC’s 3-month core rates.

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