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Short-End Govt Bonds See Largest Spread Over Tsys Since Late Dec

CANADA
  • Canadian short end govt bonds have continued to underperform relative to Treasuries, with the 2Y some 25.5bps higher than its US counterpart.
  • The 26.2bp touched earlier is the largest spread since Dec 27 and up from a low of 16bps just two days ago.
  • Whilst a continuation of yesterday’s steepening vs the US, today’s move comes as the Canada 2Y have rallied just -1.2bps to 1.261% vs Tsys -3.6bps at 1.006% ahead of next week’s Fed and BoC meetings.

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