8:06 p.m. Update Shell Game: The Bank of Canada has hacked 150 bps off its policy rate in just 23 days. Banks have matched the entire drop with 150 bps of prime rate cuts. BoC Governor Stephen Poloz said that was vital to “cushion” the COVID-19 “blow” for consumers. And, if you only considered banks’ prime rate reductions, they’d look...
The Bank of Canada has slashed its key rate for the third time this month, using what many think are its last rounds of monetary policy ammunition.
6:46 p.m. Update Prime Still Slated to Fall: Financial markets are still forecasting a 50-bps cut to the Bank of Canada’s overnight rate by April 15. Given government pressure on banks to pass through BoC cuts via prime rate, the expectation is for prime to fall to 2.45%. And while we were wrong on banks not cutting their prime rates...
3:12 p.m. Update Crude Reality: A semblance of optimism returned to markets today, but what really bears watching is oil. COVID-19 and other concerns aside, Canada’s economy is not out of the woods until oil prices run higher. There’s a rumour the Saudis and U.S. could ally on oil, which could be bullish. We’re going to get good news on...
Some quick hits on the mortgage/rate market (we’ll update these throughout the day): 4:14 p.m. Update Yields Soar: Canada’s 5-year bond yield launched 13 bps today as investors sold everything that wasn’t nailed down, including stocks and bonds, and rushed into cash. Rocketing bond yields are bullish for fixed mortgage rates and we’re seeing more lenders, including banks, react by...
Some quick hits on the mortgage/rate market (we’ll update these throughout the day): 5:14 p.m. Update Behold Sub-2% Variables:Existing variable-rate borrowers with prime – 1.00% are now enjoying 1.95% mortgage rates. Some homeowners have prime – 1.30% or lower. That’s an incredible 1.65%. New borrowers can still get prime – 1.00% or better but, as noted below, they have to...
The world’s most powerful central bank has slashed its main interest rate by one whole percentage point. This is the U.S. Federal Reserve’s largest emergency cut in its100+ year history. The move is a desperate bid to keep money markets functioning and stimulate borrowing and economic activity.Malls, restaurants, bars, factories, sports seasons, schools, international borders and even Vegas casinos are...
Our Big 6 Banks chose not to announce their prime rates following Friday’s surprise Bank of Canada rate drop. Instead, people in a floating rate mortgage or HELOC must wait to learn how the BoC’s move will impact their budgets. Banks could take a few days or more than a week. This isn’t unheard of. Back in 2015, when the...
The Bank of Canada has made an unscheduled emergency rate cut for the first time since the 2009 financial crisis. Today, it dropped its overnight rate half a point to 0.75%, its second 50-bps cut in nine days. In a statement, the BoC said: “It is clear that the spread of the coronavirus is having serious consequences for Canadian families,...
Canada could see government interest rates below zero for the first time in history. That’s not a prediction, but it’s a real possibility. The probability of recession has surged from the coronavirus pandemic and oil market collapse. The Bank of Canada has just 125 basis points of rate-cutting left before it hits zero. That is insufficient ammunition to fight the...
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