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USDCAD Gains As Yields Slide

CANADA
  • GoCs have extended their earlier rally, dragged higher by Treasuries despite a modest tail for the US 10Y auction having mostly faded the CAD 2Y auction earlier. The bull steepening remains, with 2YY -9.5bps (-14.5bps Tsys) and 10YY -7bps (-9bps Tsys).
  • Combined with the S&P E-mini pushing session lows, it hurts CAD on a relative basis, sliding from mid-pack on the day to second only to SEK for worst performer.
  • USDCAD quickly gains 30 pips to poke through yesterday’s high of 1.3406 but still room to resistance at 1.3473 (Apr 21 low).

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