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Modest Version Of Rally In Treasuries Continues

CANADA
  • GoCs have re-gathered their strength after opening firmly, with front end belly yields 3-4bps lower and long end yields down 1.5-2.5bps.
  • The slope of the yield curve remains historically close to that of Tsys, with the 2YY of 1.504% near parity and the 10YY only 5bp lower at 1.868%.
  • Coming ahead of the BOC on Wed, GoCs have provided some recent easing in financial conditions with 10YY 11bps off highs.
  • The 2s10s of 36bps is just off recent flats though, last seen in Nov-2020, highlighting the difficulty in controlling high inflation without weighing excessively on medium-term growth.

Canada G0C 2s10s Source: Bloomberg


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