10:30 AM EDT, 06/19/2024 (MT Newswires) -- Based solely on policy expectations, CIBC on Wednesday said it believes the 10yr sector is "fairly valued as the level of neutral" (proxied via 3y1y @ 2.75%) and 5y5y risk neutral yields (3.25%) are both within the Bank of Canada's estimated neutral rate range (2.25% to 3.25%). Elsewhere, CIBC sees some potential for term premia to rise as cuts are delivered, "especially if we see a more acute contraction of economic activity". Accordingly, the bank believes the 10yr sector looks less attractive from a fundamental perspective, and it sees the most value in 2s10s steepeners in the months ahead.

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