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Modest GoC Rally Ahead Of Labor Productivity Data, BoC Decision

CANADA
  • GoCs yields sit 2-3bps lower on the day as chip into yesterday’s much larger sell-off, mostly tracking and for the 10Y slightly outperforming Tsys after yesterday’s clearer underperformance.
  • It comes ahead of today’s BoC decision (preview here: https://roar-assets-auto.rbl.ms/files/55612/BOCPreviewSep2023.pdf) but first we get labor productivity/ULCs for Q2 at 0830ET.
  • Labor productivity is seen declining -0.5% non-annualized in Q2 (not helped by GDP marginally contracting despite population growth of circa 3% annualized) after a particularly weak run with four negative quarters and the level of productivity below pre-pandemic levels.

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