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Forex Flash: Italian yields rise in auction – BBH

Brown Brothers Harriman analysts note that Italy saw a rise in yields at today's auction of some 3.45 bln euro of 2015 notes (2.3% from 1.85%) since last month's auction, reflecting the rise in the secondary market that has taken place since the Jan sale.

The team note that it also sold some long dated paper (2026 and 2040 bonds) and highlight that there are reports suggesting Italy is probing market conditions to bring 30-year paper to market. While some observers will blame nervousness ahead of the election, we note Italian 10-year bond yields are off 11 bp over the past week and down 3 bp today.

Forex Flash: Switzerland focused on holding Euro floor – Societe Generale

Sebastien Galy, Senior FX Strategist at Societe Generale notes that Switzerland is clearly bent on holding its EURCHF floor and has consequently been forced to activate its countercyclical buffer.
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Forex Flash: Narrower US-Canada yield spreads may extend CAD slide further – TD Securities

Since December, US 10-year yields have been tracking higher since December and nudging up towards 2.00% again, eroding Canada’s yield premium at the long end of the curve in recent weeks (more or less flat to the US right now). "Short-term term spreads have steadied in the middle of the trading range of the past few months", wrote TD Securities analysts Shaun Osborne and Greg Moore, adding that while better US numbers are broadly positive for Canada’s economic prospects (and the CAD, by extension), narrower yield spreads over the USD do suggest that the gentle slide in the CAD seen recently may extend a little further". Also, the free-trade talks between Europe and Canada are nearing completion, but they're not expected to have a material impact on the market.
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