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RBC On Notable Issuance Developments

CANADA
  • Planned conventional bond issuance of C$172B for 23/24 was higher than our expectations, though below the C$185B in FY22/23.
  • There were meaningful changes in each sector, with the cancellation of 3’ s after the two upcoming auctions being the most notable, whilst higher front-end and lower back-end issuance were a general feature.
  • The market reaction saw 2s30s move almost 5bp flatter post announcement (to -70bp) and CA/US 30y spreads 3bp tighter to -74bp.
  • Another major development is the government looking at rolling CMHC’s Canada Mortgage Bond (CMB) program (C$40bn/year) into the GoC borrowing program. Details are sparse though, awaiting with updates due for the Fall update.

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