Wednesday, 20 June 2012

Canada Bonds Nursing Wounds Inflicted by Fed Speculation

The Canadian bond market, along with US Treasurys is still nursing the wounds inflicted by speculation that the Fed will announce some new monetary stimulus when its policy statement is released in less than half an hour. Two-years are yielding 1.077% vs 1.042% late Tues, 10-years at 1.794% from 1.761%. If the Fed disappoints those market players who are salivating over the prospects of more liquidity, that will be like applying a soothing balm to the bond market's injuries, and perhaps put the market back on a stronger footing.