Five-Year Yields Hit Highest Since October 2008: Canada Credit – BusinessWeek

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

Long-term Treasuries fall on signs of stability

 Globe and Mail – Canada – Critically for the US economy, the rise in government yields does not seem to be having an effect on mortgage rates, which need to remain low to bolster the …

reportonbusiness.com: Long-term Treasuries fall on signs of stability

Canada’s Dollar Strengthens After Carney Says System Works Well – Bloomberg.com: Canada

 Bloomberg – USA The US central bank also reiterated plans to buy agency debt and mortgage-backed securities and said it will study buying Treasuries, a policy known as …

Bloomberg.com: Canada