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Year-End Pricing Softens 30bps In Canada & NZ Over The Past Few Weeks

STIR

STIR markets within the $-bloc persist in foreseeing a notable easing cycle in 2024. In fact, over the last three weeks, the pricing for the year-end official rate in Canada and NZ has eased by approximately 30-35bps. Conversely, year-end OIS pricing in Australia has softened by around 10bps, while remaining unchanged in the US. As for overnight developments:

  • There were few hawkish surprises from Fed Chair Powell’s testimony to Congress, where he reiterated the Fed’s view of cutting interest rates "at some point this year" but not until it becomes more confident that inflation will keep falling.
  • The Bank of Canada kept its policy rate on hold at 5.0% for a fifth consecutive meeting. BoC Governor Macklem said, “It’s still too early to consider lowering the policy interest rate”. In the statement, the line “the council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation” was kept.


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STIR markets within the $-bloc persist in foreseeing a notable easing cycle in 2024. In fact, over the last three weeks, the pricing for the year-end official rate in Canada and NZ has eased by approximately 30-35bps. Conversely, year-end OIS pricing in Australia has softened by around 10bps, while remaining unchanged in the US. As for overnight developments:

  • There were few hawkish surprises from Fed Chair Powell’s testimony to Congress, where he reiterated the Fed’s view of cutting interest rates "at some point this year" but not until it becomes more confident that inflation will keep falling.
  • The Bank of Canada kept its policy rate on hold at 5.0% for a fifth consecutive meeting. BoC Governor Macklem said, “It’s still too early to consider lowering the policy interest rate”. In the statement, the line “the council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation” was kept.


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