🏦🔺Implied Rates See BoC Peaking In 6-Months: Cable FX Macro
- Rosbel Durán
- Sep 25, 2022
- 1 min read
Rate forwards curve price in the policy rate in Canada peaking in 6-months, this is the earliest in the G10. The Fed is not priced in to peak sooner, forwards see the 1y tenor at 4.70% and, while rate cuts are seen following
It is worth noting that Fed pricing has been brought forward, back in June, you'd find a +10bp calendar spread between the 6-month and 1-yr tenors, now this is almost flat
Implied rates are pricing rate cuts from the BoC at current policy rate levels in the 2-yr and 3-yr tenors. Meaning that the market expects the Canadian policy rate to be lower from the current 3.25% in 2-yrs
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