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Very Little Reaction To The BoC Minutes

CANADA
  • GoCs continue to modestly underperform Tsys, more so at the longer-end after a well-received US 10Y auction. Can-US differentials: 2Y -32bps (+1bp), 10Y -65bps (+2.5bp).
  • USDCAD holding within session ranges and at ~1.347 has pushed lower on day against a favorable risk backdrop with equity futures in particular pushing higher.
  • The earlier low of 1.3456 stopped short of support at 1.3445 (20-day EMA) after which lies a key 1.3359 (Jan 31 low).
  • BoC officials explored alternate scenarios around potential interest-rate cuts at their meeting last month and strongly agreed on the need to avoid any U-turn once they move, according to minutes of the Jan. 24 decision to hold rates at their highest since 2001.
  • That meeting saw official policy change to “discussion of monetary policy is shifting from whether our policy rate is restrictive enough to restore price stability, to how long it needs to stay at the current level.”

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