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Email this9:25 pm
September 29, 2017
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AltaRed said
...I am a bit disappointed the BoC didn't just do 25bp just to shake the sheets somewhat.
Should not be any surprise. The market moved too far away, they had to keep in lockstep.
4:20 am
April 27, 2017
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smayer97 said
it is already quite clear that the near future is hawkish... and as I indicated before, the market looks poised for another 50 pt drop by end of Jan. or so. And not because of any recent announcements
It's clear that it will be a nice warm and sunny day, very cloudy, non stop rain and hail with multiple tornadoes touching down across the region.
It’s gibberish.
This looks more like profit taking, after the BoC moved in the direction of the market.
Also gibberish. The bond market can’t both “take profit” and “be poised for another 50 bps drop by the end of January”. Can’t blow hot and cold.
4:59 am
September 29, 2017
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mordko said
smayer97 said
it is already quite clear that the near future is hawkish... and as I indicated before, the market looks poised for another 50 pt drop by end of Jan. or so. And not because of any recent announcements
It's clear that it will be a nice warm and sunny day, very cloudy, non stop rain and hail with multiple tornadoes touching down across the region.
It’s gibberish.
This looks more like profit taking, after the BoC moved in the direction of the market.
Also gibberish. The bond market can’t both “take profit” and “be poised for another 50 bps drop by the end of January”. Can’t blow hot and cold.
Of course. Thanks for explaining it. I get it now. :-\
5:13 am
February 7, 2019
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smayer97 said
Of course. Thanks for explaining it. I get it now. :-\
On a similar topic, perhaps as an interlude ...
What came first? The chicken or the egg?
| CGO |
9:35 am
February 7, 2019
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mordko said
Reaction so far is the exact opposite. Dollar is up, bond yields are up.
It’s because the 0.5% drop was already priced in but markets are reacting to unexpectedly hawkish forward guidance from the bank.
HISA rates will fall by GIC rates might even go the other way.
2 hours of market data is little less than I'd use to reach any kind of correlation or conclusion ...
| CGO |
10:05 am
October 26, 2022
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0.5% just happened.
Looks like Jan 2025 another 0.5% drop is inevitable. I am already seeing emails flooding in from banks announcing saving rates decreases.
What are we gonna do?
With real inflations stay high (let's be honest, at our age - who is buying cars, clothes, electronics...) but have you noticed the prices for Olive oil, healthy snacks, fruit and vegi, anything that older people should eat just get more and more expensive.
Do they expect us to go into stocks? If you are in your 60's you might have another 40 years to live, but to live off what?
10:39 am
October 27, 2013
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One's personal inflation likely bears little resemblance, except by coincidence, to national or regional data...which is real at the national or regional level. As individuals, our personal inflation will be higher or lower than the aggregate data.
There is an online calculator on a line item basis for people to calculate their personal inflation. They best use it rather than arm waving about what is real vs fantasy. Many of us seniors have personal inflation well below the national and regional data, particularly if we own our housing mortgage free.
https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020cal-eng.htm
If one was to look at appropriate 'independent' financial education resources have have no bias/conflict of interest overtones, a 'rule of thumb' asset allocation model* would have 100-age in equities. A 60 year old might have 40% in equities (index ETFs are perfect) to manage their withdrawal plan on a 4% SWR model (Trinity study) or modified 4% SWR model which is actually far better and responsive to market shifts than the original 4% SWR model.
Every individual has their own 'sleep at night' factor and many will want to be more conservative than others in their investment holdings. That is their call to do so, but it is also their responsibility to understand those investment returns will be lower than taking on higher risk. That is the entire basis of capital market financial reward system.
* or variations thereof such as 110-age, etc.
11:17 am
April 27, 2017
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cgouimet said
2 hours of market data is little less than I'd use to reach any kind of correlation or conclusion ...
Correlation between BOC announcement and market reaction couldn’t have been clearer. If you hold bonds, you would have seen reaction immediately following the announcement. Bond yields tend to be quite stable unless there is news that impacts them.
Does not say much about long term future because new information will become available but correlation between the announcement and bond yields is blatant.
This is GoC bond ETF called ZFM. Bank published press release at 9.45 am. Yields have been dropping in the lead up to the release but jumped immediately after.
12:29 pm
September 29, 2017
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Momentary reactions do not a trend make.
1:49 pm
March 30, 2017
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smayer97 said
Momentary reactions do not a trend make.
it proves 100% market REACT to CB and not the other way around.
3:03 pm
September 29, 2017
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savemoresaveoften said
it proves 100% market REACT to CB and not the other way around.
Market reactions is the cumulative effect, not just a momentary "reaction". What matters is where does the market go overall. Market trend is the real reaction. If you do not understand that, I'm not sure what else I can say to explain it.
5:55 pm
November 19, 2022
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mordko said
Correlation between BOC announcement and market reaction couldn’t have been clearer. If you hold bonds, you would have seen reaction immediately following the announcement. Bond yields tend to be quite stable unless there is news that impacts them.
Does not say much about long term future because new information will become available but correlation between the announcement and bond yields is blatant.
This is GoC bond ETF called ZFM. Bank published press release at 9.45 am. Yields have been dropping in the lead up to the release but jumped immediately after.
‘Stubborn’ fixed mortgage rates might not fall despite Bank of Canada cut
https://globalnews.ca/news/10915042/bank-of-canadas-rate-cut-mortgage-impact/
BOC VS Bonds, US Federal Reserve and the Loonie
FYI
The Canadian bonds totally ignore BOC rate cut yesterday all Up...https://www.cnbc.com/bonds/
The 10 YRS US Bond is on fire after 10-year Treasury yield nears 4.3% after wholesale inflation comes in hotter than expected
6:57 pm
September 29, 2017
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US market is different than CDN market.
4:51 am
April 27, 2017
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UkrainianDude said
/The 10 YRS US Bond is on fire after 10-year Treasury yield nears 4.3% after wholesale inflation comes in hotter than expected
Yes, this is significant. If American economy and inflation stay hot then BoC will be very limited in what it can do. Already the discrepancy in overnight rates is pushing CAD down to multi-year lows. Cash might flood out of CAD and into USD, weakening CAD even more and reigniting inflation in Canada.
6:03 am
November 19, 2022
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mordko said
Yes, this is significant. If American economy and inflation stay hot then BoC will be very limited in what it can do. Already the discrepancy in overnight rates is pushing CAD down to multi-year lows. Cash might flood out of CAD and into USD, weakening CAD even more and reigniting inflation in Canada.
BofC should not decrease the interest rates pushing Canadians to borrow more, Canadians already are one of the most indebted nations in the world.
https://www.imf.org/external/datamapper/HH_LS@GDD/CAN/GBR/USA/DEU/ITA/FRA/JPN/VNM
7:11 am
October 27, 2013
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The Canadian bond yield curve is now close to un-inverting https://www.worldgovernmentbonds.com/country/canada/
One more 25bp BoC cut would do it, or a slight yield uplift in 5+ year bonds. We should not expect the 5 yr and longer bond maturities to decrease further as they must compete to some degree with higher yield US Treasuries.
It is also a reason for mortgage >1 yr fixed term interest rates (and multi-year GIC rates) not to fall further. I suspect they will be range bound for awhile.
8:25 am
November 18, 2017
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UkrainianDude: I very much agree. Credit really needs to be reined in. Everyone wants to die in deep debt and make sure their heirs don't make off with everything! They think, hey, it works for the government, why not me?
Unless we're New Orleans gamblers, heirs don't inherit debt.
RetirEd
12:51 pm
March 30, 2017
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smayer97 said
Market reactions is the cumulative effect, not just a momentary "reaction". What matters is where does the market go overall. Market trend is the real reaction. If you do not understand that, I'm not sure what else I can say to explain it.
You don't need to explain. Your preach of market dictate CB's decision is just 100% wrong.
2:13 pm
September 11, 2013
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RetireEd, the deceased's remaining debts are paid out of the estate assets prior to distribution of remainder, if any, to heirs. So you can mess up your heirs by dying deep in debt.
3:04 pm
September 29, 2017
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savemoresaveoften said
You don't need to explain. Your preach of market dictate CB's decision is just 100% wrong.
Wow... you must really have a chip on your shoulder if you see my sharing of observations by many as preaching...
Anyway, you keep interpreting my words as the market "dictating" the CB direction... what I keep saying is CBs are followers of the market. Not the same thing.
Please write your comments in the forum.