BOC Rate Hike “Not Necessarily Bearish” for 10Y Notes: BofA
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
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Carlos Capistran (Bank of America Corp)
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UUID: 7947283
(Bloomberg) -- Don’t expect Canada 10y yields above 2% “unless there is some positive surprise in global growth and inflation that leads to higher rates globally,” Bank of America Corp. analysts led by Carlos Capistran write in July 11 note.
- The BOC’s anticipated rate hike by 25bp on Wednesday will “help keep inflation expectations in check”
- Canada 10y currently yields 1.87%
- Rates climbed after Poloz comments in June “due to an increase in embedded inflation expectations,” but there’s limited scope now for long-term rates to rise on higher inflation breakevens, analysts write
- U.S. would have lower inflation expectations today than at start of tightening cycle if not for election impact; “parallel Canadian program” may lead “expectations to decline over the course of a year”
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Carlos Capistran (Bank of America Corp)
To de-activate this alert, click here
To modify this alert, click here
UUID: 7947283