Canada GDP Flat: Market Reaction Triggers Rate Movement

The Canadian dollar experienced a reaction in rates following the release of the July GDP print, which came in flat. According to TD Securities Macro Research Insight, markets began selling off again despite the underwhelming nature of the print.

The move was concentrated in the front to mid-curve, with Bank of Canada pricing remaining unchanged and US yields near key technical levels. The front-end curve was under pressure, as indicated by the analysis from TD Securities.

In a statement, TD Securities noted that while they disagree with the fundamentals of selling off on such an underwhelming print, the reaction is consistent with recent positioning washouts. The move is predominantly focused in the front to mid-part of the curve, as Bank of Canada pricing remains unchanged post-print.