Canada’s 5-year government bond yield has broken above the psychological 3% level for the first time since October 2008.
Positive U.S. employment data was one of the catalysts.
Bankers’ acceptance rates keep climbing as well, with traders now firmly expecting a June or July rate hike from the Bank of Canada.
Bond yields and bankers’ acceptance rates influence fixed and variable mortgage rates respectively.
10 year bond is breaking out in the US as well. Interesting developments.
I wonder if that guy from a few weeks ago is still feeling “hoodwinked” by this site for mis-timing the end to the lowest rates in history by one week.
I would like to say how thankful I am for discovering this site. A few weeks ago I decided to get pre approved when I saw an article about rates going up. Our broker got us 3.75 per cent and I am absolutely thrilled. My understanding is that the same mortgage is over 4.25 per cent today!
Watch those Banker’s Acceptance Rate as that is what drives the pricing on VRMs. If the BA Rate (0.39%) continues to go up prior to the Overnight Rate (0.25%), then we may not see the increment below Prime dropping on VRMs as we expected it to do. If the BA stays fairly tight to BoC Prime, then we will likely see Prime minus 60 or 70 bps by the winter (maybe earlier).
Prime minus 60 is already here David…
Some people are never happy. You can save them 1% and they’ll beat you up over 1 basis point.
It is funny how all the people who complained about the “rate increase hype” are now awfully quiet.
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