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CANADA: USDCAD Hits Session Lows, Heavy Option Expiry Mostly Higher Tomorrow

CANADA
CanadaBulletMarketsForeign Exchange BulletsNorth America
  • USDCAD has pushed to session lows of 1.4313 to have reversed the overnight push higher.
  • Yesterday’s low of 1.4270 marks fresh initial support having moved closer to a key 1.4261 (Jan 20 low). Below that lies 1.4178 (Nov 6, 2024 high).
  • Tomorrow sees some particularly heavy option expiry after the dual US/Canada jobs report, mostly biased higher. Notable near-by expiry at 1.4310 ($1.1bn), 1.4355 ($0.9bn) and 1.4375 ($1.2bn). Further away, but still within recent ranges after tariff-induced swings: 1.4600 ($1.68bn), 1.4700 ($1.0bn), 1.4740 ($1.5bn), 1.4800 ($1.5bn).   
  • BoC-dated OIS has 19-20bp of cuts for the Mar 12 BoC. CORRA futures point to a terminal yield of 2.36%, compared to a current overnight rate target of 3% and a neutral range at 2.25-3.25%.
  • Can-US 2Y differentials at -161bps have mostly kept to the shift seen after Monday’s 30-day US tariff reprieve having bottomed at almost -180bps earlier Monday.
  • Later, BoC Gov Macklem speaks on “Future challenges for monetary policy in the Americas” in video remarks at a BIS event. Text will be released at 1700ET but with no audience Q&A or media availability scheduled. 
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  • USDCAD has pushed to session lows of 1.4313 to have reversed the overnight push higher.
  • Yesterday’s low of 1.4270 marks fresh initial support having moved closer to a key 1.4261 (Jan 20 low). Below that lies 1.4178 (Nov 6, 2024 high).
  • Tomorrow sees some particularly heavy option expiry after the dual US/Canada jobs report, mostly biased higher. Notable near-by expiry at 1.4310 ($1.1bn), 1.4355 ($0.9bn) and 1.4375 ($1.2bn). Further away, but still within recent ranges after tariff-induced swings: 1.4600 ($1.68bn), 1.4700 ($1.0bn), 1.4740 ($1.5bn), 1.4800 ($1.5bn).   
  • BoC-dated OIS has 19-20bp of cuts for the Mar 12 BoC. CORRA futures point to a terminal yield of 2.36%, compared to a current overnight rate target of 3% and a neutral range at 2.25-3.25%.
  • Can-US 2Y differentials at -161bps have mostly kept to the shift seen after Monday’s 30-day US tariff reprieve having bottomed at almost -180bps earlier Monday.
  • Later, BoC Gov Macklem speaks on “Future challenges for monetary policy in the Americas” in video remarks at a BIS event. Text will be released at 1700ET but with no audience Q&A or media availability scheduled.