The Bank of Canada ("BoC") has seen better-than-expectedinflation prints over the past three months, increasing thelikelihood that it may begin to reduce its policy rate in thesummer. In previous easing cycles bonds have generatedpositive returns as interest rates have fallen in the monthsleading up to the first rate cut. Given the modest rise in interestrates year-to-date, we anticipate that the lead-up to the BoC'sfirst policy rate cut later this year will exhibit similar patterns tohistorical easing cycles.