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Solid FI Outperformance With BoC Minutes, FOMC Ahead

CANADA
  • USDCAD trading in a narrow 30 pip range so far today (albeit at the high end) belies further outperformance of Canadian FI.
  • It’s seen across the curve but is most notable at the front end with 2Y GoC yields -3bp vs +2bp for Tsys (Can-US diff -52bps). There is similar in the BAX white pack and more so into 2024.
  • It comes ahead of a mostly expected 25bp hike from the FOMC against the backdrop of the BoC’s conditional pause, although first comes the BoC’s minutes just 30mins beforehand at 1330ET. However, being for the Mar 8 decision they are seen as somewhat stale.

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