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N/A Labour Market Data Weighs On Bonds, One Further BoC Hike Now Fully Priced

CANADA

Canadian government bond benchmarks now sit 10-12bp cheaper on the day after a ~3bp parallel shift higher in yields ahead of the North American labour market data.

  • The combination of the spill over from the U.S. NFP report and the generally firmer than expected showing for the Canadian labour market (based on headline metrics) are the drivers, with the 5- to 10-Year zone leading the weakness.
  • Terminal policy rate pricing on the BoC-dated OIS strip now sits at ~5.27% (come March ‘24), after adding ~9bp vs. pre-data levels, meaning that one further 25bp hike is now more than fully discounted.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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