PIPELINE: Corporate Bond Issuance Update: $1.75B Raizen 2Pt Launched

• USDCAD has pulled back to 1.4335 for a > 100 pip decline in recent hours in continued gyrations around tariff considerations and the extent to which President Trump is using threats as a negotiating tool.
• Resistance is at the 1.4516 seen after Trump re-focused tariff threats on Canada and Mexico late yesterday. Support remains at yesterday’s low of 1.4262 having pierced multiple technical levels.
• Canadian officials maintain retaliation rhetoric, with Trudeau earlier advocating dollar-for-dollar retaliatory tariffs. Opposition leader Poilievre (firm favourite to win the next election, be it early or otherwise) meanwhile hasn’t commented on his preferred stance for contesting US tariffs.
• 2Y GoC yields are 2bp higher since the CPI report with 2Y Tsy yields matching the move for back to little changed on the day.
• The Can-US 2Y yield differential is therefore little changed at -137bps, set to close at joint multi-decade lows, last seen lower in the late 1990s.
• As for the nearer-term, there is 21bp of cuts priced for the BoC next week, i.e. mostly pricing taking the overnight rate target down to 3%.
• CORRA futures see a terminal close to 2.75%, whereas many analysts see a terminal closer to the bottom of the BoC’s estimated neutral range of 2.25-3.25%, if not below. 

A new survey from the Associated Press-NORC has found that Americans are divided over US President Donald Trump’s 'Day 1' agenda, with strong support for many of Trump's hardline immigration measures but comparatively weak support for the energy items in the agenda. 

• AP: “Most Americans think increasing security at the U.S.-Mexico border should be at least “a moderate priority” for the federal government… and about half think it should be a high priority.”
• The report notes "According to AP VoteCast, only about 4 in 10 voters in the 2024 presidential election said U.S. energy policy should focus on expanding production of fossil fuels, such as oil and gas. Most -- 55% -- said it was better to focus on expanding use of alternative energy, such as solar and wind."
• AP found that about one-third of Americans “somewhat” or “strongly” favor increasing oil drilling on federal lands, while about 4 in 10 are opposed. Increasing oil drilling is broadly popular with Republicans but not with Democrats or independents."
• The weaker support level for Trump's oil and gas proposals is likely to complicate the passage of energy legislation through Congress, necessary if Trump is to formalise his executive orders into durable law. 

Figure 1: Support for Trump’s Day One Actions

Source: Associated Press-NORC

• US TSY 52W BILL AUCTION: HIGH 4.025%(ALLOT 78.32%)
• US TSY 52W BILL AUCTION: DEALERS TAKE 29.46% OF COMPETITIVES
• US TSY 52W BILL AUCTION: DIRECTS TAKE 1.82% OF COMPETITIVES
• US TSY 52W BILL AUCTION: INDIRECTS TAKE 68.73% OF COMPETITIVES
• US TSY 52W AUCTION: BID/CVR 3.14