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Modest Cheapening For GoCs, TD Chief Econ Mulls Recession Odds

CANADA
  • GoCs hold modestly cheaper, with yields 0.5-1bps higher across the main benchmarks and only modestly underperforming Tsys in 2Y space.
  • The 2Y GoC yield is off yesterday’s fresh post-Jan’08 high of 3.509%, currently 3.476%, but helps keep the curve within 10-15bps of post-1990 recent lows, with 2s5s and 2s10s at -31bps and -43bps.
  • On the prospects of recession, TD’s Chief Economist Beata Caranci told the Globe and Mail she sees equal likelihood of a soft landing or shallow recession, with little prospect for a deep recession as there isn’t evidence of the historical excesses that would normally get you there. Similarly, they believe the bulk of the housing correction has probably already been absorbed.

Source: Bloomberg


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