Tag Archive: bond yields

For now, at least, cost pressures are easing slightly for Canadian mortgage lenders.

6:58 p.m. Update CMHC on Payment Deferrals: “CMHC has provided increased flexibility to defer mortgage payments on its insured homeowner mortgage loans, which means lenders are now able to defer payments on a borrower’s CMHC-insured mortgage up to six months without CMHC’s approval. Borrowers should speak to their lenders directly by going through their default management department to confirm if...

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...

Five quick bulletins from the mortgage market: 1. Canada’s 5-year swap, which guides fixed mortgage rates, is on track for one of its biggest down days in history. Driving this carnage is the biggest oil rout since the 1991 Gulf War. JP Morgan says, “The oil and gas sector represents about 6% of [Canada’s] GDP but we expect the hit...

If you ever wondered what bond yields would do if we were facing a potential nuclear holocaust, we’re getting a small taste of it today. We are seeing Canada’s 5-year yield, normally a key driver of fixed mortgage rates, crash for the second week in a row. This plunge in yields is eerily reminiscent of the vicious 2008 credit crisis,...

If you want to know what investors think of Canada’s economic prospects, this chart almost says it all: This sort of meltdown signals raw fear. Such moves are not usually reflective of just a little economic blip ahead, but a king-sized economic crisis. No hyperbole intended. What does it mean for rates? It means rate expectations are falling by the...

Amid a global growth scare, the BoC has slashed Canada’s most-watched rate for the first time in almost five years. “…The COVID-19 virus is a material negative shock to the Canadian and global outlooks,” the Bank said in its statement today. Despite how concerned the bank is about fuelling more debt, it chopped its overnight target by 50 bps to...

Consider the state of our world: The yield curve is inverted (usually recessionary) Unemployment may be close to a cycle bottom (often recessionary) Oil prices are plunging (disinflationary) Consumers have too much debt and not enough savings(usually disinflationary) The market is desperate for yield (bullish for bonds / bearish for rates) Inflation is well-anchored (eliminating the need for rate hikes)...

One of the best short-term leading indicators of 5-year fixed mortgage rates is making a beeline towards a 2.5-year low. Canada’s 5-year swap rate is now just 1/10th of a percentage point away from this key threshold, which, if broken, will lead to further fixed-rate cuts. Banks routinely price fixed mortgages against swaps, which are interest rate derivatives used to...

Bond yields are plummeting globally as the coronavirus spreads to South Korea (833 cases), Italy (215 cases) and Japan (154 cases), among other countries. Media outlets are increasingly using the “P” word (pandemic), and the more they do, the more yields will drop. Even though we have just 9 cases so far, Canada is not an island in this crisis....