Posts from the ‘Monday Morning Mortgage Rate Updates’ Category

When the U.S. Federal Reserve raises its policy rate on Wednesday, as is widely expected, will U.S. bond yields rise? And will their Canadian equivalents and our mortgage rates get taken along for the ride? Today’s post offer my take.

The gap between our fixed and variable mortgage rates has widened of late, and my read of the tea leaves says that it will continue to do so in the near future. Today’s post explains why.

There is plenty of action south of the 49th parallel and to that end, here are five recent observations about U.S. events that are unfolding that will weave their way into Canada's mortgage-rate narrative over time.

Last week was an interesting one for five-year Government of Canada (GoC) bond yields, which our five-year fixed mortgage rates are priced on. We started the week with GoC bond yields falling in sympathy with their U.S. counterparts as investors re-evaluated their bets that the Trump presidency would lead to higher growth and inflation. Thus far, President Trump has focused on his anti-immigration and protectionist trade policies and not on his promises for fiscal stimulus and tax cuts.

The Fed’s latest commentary matters to anyone keeping an eye on Canadian fixed mortgage rates because our bond yields have moved in virtual lock step with their U.S. equivalents since the start of the Great Recession. While our economies now appear to be progressing along very different trajectories, for as long as the current bond yield correlations hold, if U.S. interest rates rise, Canadian rates will get taken along for the ride. Here are five highlights from the Fed’s latest statement, with my comments added.

In today’s post we’ll look at how the tumultuous start to the Trump Presidency is likely to affect Canadian mortgage rates, because really, given the current news cycle, how could we not?

The Bank of Canada (BoC) left its overnight rate unchanged last week, which was widely expected, and that means that variable mortgage rates should continue to hold steady. (I say “should” to allow for the possibility that another lender follows TD Bank and arbitrarily raises its prime rate for its entire book of existing variable-rate borrowers.)

The Bank of Canada (BoC) meets this week and while the Bank is not expected to move its policy rate, it will also release its latest Monetary Policy Report (MPR). I read the MPR it with interest because it gives us the Bank’s views on the state of our economy and includes projections of where it thinks our economic growth will be headed over the next several years. In this most recent version, the key question for anyone keeping an eye on mortgage rates is how the recent uptick in our economic data will impact the Bank’s dovish rate view. In next week’s post, we will answer that question by taking a detailed look at the BoC’s January MPR. Five-year GoC bond yields rose by one basis point […]