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Latest News - Weekly Government Bond Expected to be Reduced - October 2021



Latest News - October 27th, 2021

Governor Tiff Macklem is expected to reduce weekly government bond purchases by one-half on Wednesday to $1 billion (US$809 million). That will mark the fourth time over the past 12 months the central bank has rolled back a program that has poured hundreds of billions into the financial system since the start of the COVID-19 pandemic. By doing so, they will push up the bond yield, thus putting pressure on fixed rates to increase. Keep an eye on the bond yield, and remember the banks need a spread of 110 to 130 bps to remain profitable.


Current 5 Year Bond Yield - 1.441

Current 5 Year Insured Rate - 2.39 (less than 100 bps spread)


If history repeats itself, the 5-year rate should be in the area of 2.60% to 2.70%.



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