Canadian Bond Markets are About to Get Bullish

The Canadian fixed-income market has experienced a sea change since the brutal days in 2021 and 2022 when central banks jacked up interest rates to almost nose-bleed levels in response to runaway inflation

Hidden Economic Hardships Will Hit Canadian Inflation: The weakness in Canadian data is somewhat masked by the strong immigration numbers. “The aggregate numbers look good. But on a per capita basis, it does not look good Hidden Economic Hardships Will Hit Canadian Inflation: The weakness in Canadian data is somewhat masked by the strong immigration numbers. “The aggregate numbers look good. But on a per capita basis, it does not look good

U.S. to Follow ‘Cut and Pause’ Pattern: Canada’s interest rates will come down quite a bit, and because it’s not fully priced by the market, it should create a good environment for Canadian bonds, and especially for Canadians who hold mostly domestic fixed income.

In an environment where the Bank of Canada is going to cut rates, we believe that corporate bond spreads are well-supported. There are some weaknesses [in the sector] but we avoid certain segments of the economy a little more than others.