MNI BRIEF: U.S. Senate Panel Advances Bessent Nomination

MNI BRIEF:Trudeau Sees Dollar-For-Dollar US Tariff Retaliation

CANADA TO HAVE STRONG RESPONSE TO ANY US TARRIF: TRUDEAU

MNI China Daily Summary: Tuesday, January 21

MNI: PBOC Net Injects CNY201 Bln via OMO Tuesday

MNI: PBOC Sets Yuan Parity Lower At 7.1703 Tue; -1.66% Y/Y

EZ/UK T-Bill Calendar: 3/6/12-Month EU-Bill Auction Wednesday

EZ/UK Bond Supply Calendar: Finland, Spain Synd in Near Future

MNI CHICAGO REPORT ANNUAL SA: HEADLINE BAROMETER UNREVISED

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2025 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

CANADA: Rates Reverse CPI Rally, Greater Than 100pip Pullback In USDCAD

CANADA
CanadaBulletMarketsFixed Income BulletsForeign Exchange BulletsNorth America
  • USDCAD has pulled back to 1.4335 for a > 100 pip decline in recent hours in continued gyrations around tariff considerations and the extent to which President Trump is using threats as a negotiating tool.
  • Resistance is at the 1.4516 seen after Trump re-focused tariff threats on Canada and Mexico late yesterday. Support remains at yesterday’s low of 1.4262 having pierced multiple technical levels.
  • Canadian officials maintain retaliation rhetoric, with Trudeau earlier advocating dollar-for-dollar retaliatory tariffs. Opposition leader Poilievre (firm favourite to win the next election, be it early or otherwise) meanwhile hasn’t commented on his preferred stance for contesting US tariffs.
  • 2Y GoC yields are 2bp higher since the CPI report with 2Y Tsy yields matching the move for back to little changed on the day.
  • The Can-US 2Y yield differential is therefore little changed at -137bps, set to close at joint multi-decade lows, last seen lower in the late 1990s.
  • As for the nearer-term, there is 21bp of cuts priced for the BoC next week, i.e. mostly pricing taking the overnight rate target down to 3%.
  • CORRA futures see a terminal close to 2.75%, whereas many analysts see a terminal closer to the bottom of the BoC’s estimated neutral range of 2.25-3.25%, if not below. 
image
207 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • USDCAD has pulled back to 1.4335 for a > 100 pip decline in recent hours in continued gyrations around tariff considerations and the extent to which President Trump is using threats as a negotiating tool.
  • Resistance is at the 1.4516 seen after Trump re-focused tariff threats on Canada and Mexico late yesterday. Support remains at yesterday’s low of 1.4262 having pierced multiple technical levels.
  • Canadian officials maintain retaliation rhetoric, with Trudeau earlier advocating dollar-for-dollar retaliatory tariffs. Opposition leader Poilievre (firm favourite to win the next election, be it early or otherwise) meanwhile hasn’t commented on his preferred stance for contesting US tariffs.
  • 2Y GoC yields are 2bp higher since the CPI report with 2Y Tsy yields matching the move for back to little changed on the day.
  • The Can-US 2Y yield differential is therefore little changed at -137bps, set to close at joint multi-decade lows, last seen lower in the late 1990s.
  • As for the nearer-term, there is 21bp of cuts priced for the BoC next week, i.e. mostly pricing taking the overnight rate target down to 3%.
  • CORRA futures see a terminal close to 2.75%, whereas many analysts see a terminal closer to the bottom of the BoC’s estimated neutral range of 2.25-3.25%, if not below. 
image