Canadian Yield Curve Inverts After Rate Cut; CAD At 6-Year Low
Mike (Mish) Shedlock | Jan 22, 2015 12:19AM ET
The currency wars picked up steam yesterday with still more unexpected central bank actions. From
Since mid-2011 the loonie has lost about 24% vs. the US dollar. However, the dollar is a lot weaker than its Canadian counterpart compared to late 2001.
Canadian Yield Curve Inverts
- 30-Year: 2.044% (Yesterday's Low 1.998%)
- 10-Year: 1.426% (Yesterday's Low 1.366%)
- 05-Year: 0.791% (Down 19 basis points, an 18% decline)
- 03-Year: 0.590% (Down 27 basis points, a 31% decline)
- 02-Year: 0.560% (Down 29 basis points, a 34% decline)
- 01-Year: 0.580% (Down 34 basis points, a 37% decline)
- 01-Month: 0.640% (Down 22 basis points, a 26% decline)
Blue Ribbon Announcement
Canada wins the blue ribbon for the first G-7 yield curve inversion since central bankers started unleashing competitive "preemptive" rate cuts.
Yield on the Canadian 1-year note, 2-year note, and 3-year note are all inverted (lower than yield on the 1-month note).
In addition, yield on on the 1-year note is inverted with the 2- and 3-year notes.
I smell a Canadian recession (and more surprise actions). A bust of the Canadian real estate bubble, one of the biggest in the world, is also on the way.
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