Canada's Flat GDP Print Triggers Front-End Curve Sell-Off

Following the release of Canada's flat July GDP print, markets began to sell off again. This reaction is seen as underwhelming by TD Securities Macro Research Insight, which notes that the move is concentrated in the front to mid-curve. The Bank of Canada pricing remained unchanged post-print, and US yields were near key technical levels.

In a statement, TD Securities Macro Research Insight 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 was predominantly focused in the front to mid-part of the curve, as BoC pricing remained unchanged post-print. The cross-market move was additionally subdued, as US yields hovered around key technical levels.