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Powell Pushes BAX Yields Even Higher

CANADA
  • BAX implied yields rose sharply on Powell’s prepared remarks and continued the move at a slower pace through and since the moderated Q&A.
  • BAH3 through to BAM4 lead the way with yields up 15-15.5bps versus the 18-19bp move in Eurodollars.
  • This continues to drive a considerable steepening in whites - with BAM3 implied yields 69bps higher than after the BOC meeting two and a half weeks ago – before more prominent inversion from BAZ3 onwards.
  • Local drivers are light this week until BoC’s Deputy Governor Kozicki speaks on households, the pandemic and monetary policy at the SF Fed on Fri. Until then, US events and geopol headlines are likely to dominate.

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