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Partial Retracement Of Dovish BoC Reaction, Likely On Strong End-2024 CPI

CANADA
  • GoCs are off post-BoC highs, which we suspect is supported by that 4Q24 CPI forecast being lifted 0.4pps to 2.5%.
  • It sees the rally in the 2Y limited to 3.5bps (still 1.5bps cheaper on the day), whilst the long-end has followed Treasuries cheaper still after strong new home sales (10Y +8.5bps, 30Y +11bps).
  • USDCAD has limited its increase to 1.3793 (touched 1.3810) but it still marks a clear breach of the bull trigger at 1.3786 (Oct 5 high). The partial retracement is helped by a stabilising in the S&P e-mini at around -1% on the day.

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