CANADA: GoCs Reverse Firmer Open With Strong Retail Sales Report
Feb-21 13:45
- 2Y GoC yields have continued to extend their increase on a strong retail sales report, now nearly 3bp higher post-release for little changed on the day after GoCs opened firmer following global FI strength.
- It also sees the Can-US 2Y yield differential back unchanged at -145bps, still clearly historically depressed but near highs since the Jan 29 BoC decision.
- USDCAD has only declined 10-15 pips on it though, at 1.4180 back easily within the day’s range and still above yesterday’s low of 1.4167. Technical trends point to a bearish theme, with support at 1.4107 (50% retrace of Sep 25 2024 – Feb 3 bull cycle).
- Retail sales were much stronger than first thought in December (at 2.5% M/M vs 1.6% in last month’s advance) following an upward revised 0.2% (initial 0.0%) in Nov, putting the -0.4% M/M in the January advance in good light.
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CANADA: CAD Assets Look Through Further Climb In Y/Y Cost Pressures
Jan-22 13:44
- The industrial product and raw materials price report didn’t have a discernible impact on Canadian asset prices although it nevertheless shows a further acceleration in cost pressures in Y/Y terms.
- BoC-dated OIS has ~21bp of cuts priced for next Wednesday’s BoC decision.
- Not linked to the data, USDCAD has since stepped higher to session highs of 1.4370 on the back of a leg higher in the BBDXY index. It remains within particularly wide recent ranges (key support at 1.4261 from Jan 20 low vs resistance at 1.4516 from Jan 21 high).
- Details: IPPI was admittedly softer than expected at 0.2% M/M (cons 0.6) after 0.6% M/M in Nov and 1.2% in Oct, although IPPI ex-petroleum has seen a more consistent recent trend with 0.4% M/M in Dec after 0.5% in Nov and 1.0% in Oct.
- That leaves IPPI ex-petroleum inflation at 5.1% Y/Y (fastest since Nov 2022) whilst raw materials inflation stands at 9.1% Y/Y or 12.1% Y/Y ex-petroleum (fastest since May 2022).
EGB OPTIONS: Bund Call Spread
Jan-22 13:38
RXH5 133.50/134.50cs, bought for 17.5 in 8.2k.
MNI: CANADA DEC INDUSTRIAL PRICES +0.2% MOM; EX-ENERGY +0.4%
Jan-22 13:30
- MNI: CANADA DEC INDUSTRIAL PRICES +0.2% MOM; EX-ENERGY +0.4%
- CANADA DEC RAW MATERIALS PRICES +1.3% MOM; EX-ENERGY +1.6%
