Five-Year Yields Hit Highest Since October 2008: Canada Credit – BusinessWeek
Filed Under Main Content · Tagged: Balance Sheet, Bank Of Commerce, Bloomberg Canada, Bond Market, Bond Yields, Businessweek, Canada Credit, Canadian Imperial Bank, Canadian Imperial Bank Of Commerce, Cash Bonds, Declines, Fixed Income Market, Fixed Rate, Imperial Bank Of Commerce, Mortgage Regulations, Strategist, Swap Transactions, Swaps, Toronto Banks, Treasuries
Bloomberg- Canada’s five-year bond yields rose to the highest level since October 2008 as banks hedged mortgages and the nation’s fixed-income market caught up to declines in U.S. Treasuries.
Canada’s home buyers are stepping up borrowing as they seek to beat pending changes to mortgage regulations and increases in interest rates. Banks that issue mortgages protect their balance sheet by selling similar-maturity securities in the secondary bond market or by making swap transactions.
“Banks are hedging seasonal mortgage flows, which is weighing on the five-year sector,” said Mohammed Ahmed, a rates strategist at Canadian Imperial Bank of Commerce in Toronto. “Banks are receiving a fixed-rate asset and to hedge that, they typically pay the fixed-rate in swaps, or sell cash bonds…”
Five-Year Yields Hit Highest Since October 2008: Canada Credit – BusinessWeek
Canadian mortgage rates on the rise
Filed Under Main Content · Tagged: Anticipation, Bank Of Canada, Basis Points, Benchmark Mortgage, Bond Market, Bond Yields, Canadian Mortgage Rates, Cibc World Markets, Economist, Fixed Mortgage, Fixed Mortgages, Fixed Rate Mortgages, Housing Market, Laurentian Bank, Mortgages Rates, Quot, Royal Bank, Td Canada Trust, Upswing, Year Mortgage
Times Colonist- Mortgage rates are on the upswing in Canada, signaling an end to historically low rates and an indication that the country’s housing market is finally poised to cool off.
Royal Bank, TD Canada Trust and Laurentian Bank announced Monday they are raising rates they charge on certain fixed mortgages, including the benchmark five-year mortgage, which will jump 60 basis points to 5.85 per cent effective Tuesday.
"This is actually a fairly large increase reflecting what’s happening in the bond market lately," said Benjamin Tal, senior economist with CIBC World Markets.
Anticipation over the Bank of Canada raising its overnight lending rate, possibly ahead of schedule, is pushing up bond yields, Tal said. And rising yields puts pressure on fixed-rate mortgages…
