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Rates remain near their all-time lows as the Bank of Canada maintains emergency rate stimulus. The Bank has repeatedly confirmed that Canada’s trendsetting overnight rate is at its “effective lower bound” That implies there’s no room for prime rate to dip further, tilting the risk-reward away from variable rates and more towards fixed rates.
The BoC’s own forecasts as well as the economist consensus now project no rate increases for at least two years (mid-2022 at the earliest). Keep an eye on the 5-year bond yield, however, as a move above 0.60% might indicate a change in rate trend from sideways to up.
Rates with exceptional value this month include:
Most benchmark rates were little changed last month, save for a 15 bp drop in the minimum qualifying rate (a.k.a. “Stress test rate”). These values are as of Sept. 1, 2020:
The economy remains fragile to say the least. Here are the main indicators worth watching: