August 16, 2022 17:33 GMT
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- USDCAD trades -0.4% at 1.2856 for just a few pips off session lows on the continued downward pressure from an earlier strong Canadian CPI print.
- A hawkish reaction to remarks from BoC’s Macklem drives sizeable underperformance in GoCs to Treasuries, especially at the front end with 2Y GoCs +13.5bps vs +6.5bps for Tsys.
- The result is the highest front end Can-US differential since the stellar US payrolls report for July at +9bps, which combined with solid equities has helped offset the hit from oil falling further.
- Currently testing the 50-day EMA at 1.2862, next support is seen notably lower with the 200-dma at 1.2748 and then a key level at 1.2728 (Aug 11 low) required to be cleared to meaningfully reinstate a technical bearish threat.