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Oil Rally Helps GoC Yields Out Climb Treasuries

  • GoCs have seen growing underperformance to Tsys in the front end to belly today, with 2YY +2bps vs unchg for Tsys and 5YY +7bps vs +5bps.
  • A further recovery in WTI has helped drive the move from both short-term inflationary and ToT/growth aspects.
  • It helps front-end Can-US yield differentials recover somewhat from spiking lower yesterday to new recent lows, but at -2bps for the 2Y and still -11bp for the 10Y, both remain depressed compared to recent months.
  • The bear steepening on the day sees 2s10s rise 7bps but at -44bps is still at levels last seen in 1990.

GoC 2s10s (white) - showing last and not ask price as in text Source: Bloomberg

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