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Treasury
US Treasury Closing Levels
3:00 Thursday vs 3:00 Wednesday2yr 99-30 vs 99-31; 4.153% vs 4.126%5yr 99-09 vs 99-13; 4.280% vs 4.255%10yr 98-26 vs 99-01; 5.094% vs 5.076%30yr 98-16+ vs 98-23; 5.095% vs 5.081%2/10 40.983 bps vs 41.701 bps5/30 81.297 bps vs 82.542 bps
Treasury
Bank of Canada's Newly Found Economic Optimism Surprises Rosenberg Research
Rosenberg Research was surprised by the Bank of Canada's notably more upbeat assessment of the country's economy in Wednesday's policy statement.Canada's central bank kept its policy rate unchanged at 2.25% but upgraded its economic outlook, expressing greater confidence that a sustained recovery is taking place, said Rosenberg Research in a note Thursday.Despite the stronger growth outlook, the shift doesn't indicate an imminent move toward tighter policy, according to Rosenberg.The BoC continues to expect inflation to decline as growth improves, noting that "economic slack will be gradually absorbed" through 2028. With underlying inflation already near target, stronger growth alone is unlikely to justify rate hikes.The central bank appears increasingly confident that the current period of economic weakness will transition into a sustained recovery, supported by tailwinds from the U.S. economy and more accommodative domestic financial conditions."We are skeptical," added Rosenberg.
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Treasury
UBS Expects Bank of Canada to Hold Rates Through 2026, Begin Hiking in H2 2027
The Bank of Canada is expected to remain on hold this year and hike rates in the second half of 2027, despite a more optimistic tone from policymakers on the domestic economic outlook, according to a UBS Global Research note.UBS acknowledged in the note published for the media on Thursday that growth could improve and broaden toward the end of the year and into 2027.However, the bank remains cautious about ongoing uncertainty surrounding the US-Mexico-Canada Agreement review, which has effectively shifted toward a trade deal renegotiation process and introduces additional risks for the outlook.Wednesday's BoC "statement was updated to reflect the recent better news on the economy and the potential for inflation to ease despite uncertainty in the outlook," wrote UBS economists in the note.The bank added that Governor Tiff Macklem's Wednesday comments suggest the BoC doesn't see an immediate risk from demand-driven inflation pressures, highlighting the economy's continued "considerable excess supply" and the challenge of balancing elevated inflation risks with weak growth.
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