BoC stuck between a rock and a good place – TDS
Source Fxstreet
The Bank of Canada is caught in a conundrum, trying to balance the impacts of trade uncertainty - and the threat of escalating tariffs - against a decent run of economic data, TDS' Head of Canadian and Global Rates Strategy Andrew Kelvin reports.
Terminal rate expectations are below levels from January 29th
"Even with the last minute reprieve from broad US trade action, the Canadian rates market is carrying a lingering tariff risk premium - terminal rate expectations are below levels from January 29th, despite strong data in both Canada and the US."
"In the most likely non-tariff scenarios, 2s are somewhere between fair and rich here. We see better asymmetry in steepeners than in outright long positions. Similarly, with Canada-US spreads at extreme levels across the entire curve, we see an appealing asymmetry in legging into short Canada/long US positions."
Disclaimer: For information purposes only. Past performance is not indicative of future results.
Recommended Articles
Supply risks in the Middle East continue to heat up, with international oil prices fluctuating at high levels.During Tuesday's Asian trading session, Brent crude futures (UKOIL-F) rose to
【Daily Brief】10-year Treasury yield briefly tops 5%, S&P 500 slips to 7,602 and the dollar firms at 99.3 as the Fed's decision eve beginsThe 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.
The 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.
Gold falls below $4,300 as higher US yields bolster Fed rate hike betsGold price (XAU/USD) tumbles to near $4,295 during the early Asian session on Tuesday. The precious metal faces some selling pressure as rising bond yields and surging energy prices strengthen expectations that the US Federal Reserve (Fed) will raise interest rates this week.
Gold price (XAU/USD) tumbles to near $4,295 during the early Asian session on Tuesday. The precious metal faces some selling pressure as rising bond yields and surging energy prices strengthen expectations that the US Federal Reserve (Fed) will raise interest rates this week.
Silver Price Forecast: XAG/USD falls to near $63.50 amid Fed hike bets, higher oil pricesSilver price (XAG/USD) loses its gains from the previous day, trading around $63.50 per troy ounce during Asian hours on Monday. Non-yielding Silver is currently facing significant headwinds driven by rising Federal Reserve (Fed) rate-hike expectations for the upcoming September decision.
Silver price (XAG/USD) loses its gains from the previous day, trading around $63.50 per troy ounce during Asian hours on Monday. Non-yielding Silver is currently facing significant headwinds driven by rising Federal Reserve (Fed) rate-hike expectations for the upcoming September decision.
Fed hike odds near 90% into Wednesday's decision — how to trade the dollar, gold and the S&P 500A 0.3% monthly core CPI print has lifted the market-implied probability of a 25bp Fed hike on 16 September to roughly 86.5% ~ 90%, which would be the first increase since July 2023. Here is the decision timeline, the pricing versus the forecasts, both scenarios, and the key levels for the dollar, gold and the S&P 500.
A 0.3% monthly core CPI print has lifted the market-implied probability of a 25bp Fed hike on 16 September to roughly 86.5% ~ 90%, which would be the first increase since July 2023. Here is the decision timeline, the pricing versus the forecasts, both scenarios, and the key levels for the dollar, gold and the S&P 500.
