Cash tsys have opened dealing 0.5-1bp richer across the major benchmarks, the curve has marginally steepened. Asia-Pac participants have faded Monday’s cheapening perhaps using the opportunity to exit short positions/enter fresh long positions. TYM3 deals at 114-18+, +0-02+, at the top of the narrow 0-02 range.
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The current bear cycle in USDCAD remains in play and the pair continues to weaken. This week’s bearish extension has resulted in a break of the 50-day EMA and 1.3562, the 50% retracement for the Feb 2 - Mar 10 rally. The move lower signals scope for a continuation towards 1.3491, the 61.8% retracement. On the upside, initial firm resistance is seen at 1.3649, the 20-day EMA.