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Desjardins: See Room For 2Y GoC Yields To Fall Further

CANADA
  • “Governor Macklem was a bit more forthcoming today in suggesting that the policy rate may now be restrictive enough to restore price stability. The speech reiterated that policymakers are prepared to increase rates further if necessary, but added that they don’t want to raise rates more than they have to.”
  • “The comments tilt somewhat more dovish than yesterday’s broadly-neutral statement insofar as he seems to be hinting that the era of rate hikes is now over.”
  • “We’re obviously going to stick with our call that the central bank is done raising rates for this cycle. However, the market has yet be fully convinced of that. As a result, we see room for 2-year yields to fall further in Canada.”

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