Invesco Canada blog

Insights, commentary and investing expertise

Interest rate outlook: Bank of Canada to pause

After raising the target overnight rate 0.25 percentage points at each of the previous two meetings, the Bank of Canada (BoC) kept the rate unchanged at its meeting on October 25, 2017. While growth has remained strong, it has slowed from the second quarter and the BoC appears ready to give its two previous rate hikes time to filter through the economy before taking further action. Additional uncertainty around the breakdown in North American Free Trade Agreement trade negotiations leaves the BoC cautious regarding future hikes. The Canadian 10-year yield appears to have peaked for the moment and yields have several reasons to fall from current levels, in our view.

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Interest rate outlook: Bank of Canada likely to raise rate again

The Bank of Canada (BoC) has hiked interest rates at two consecutive meetings, bringing the overnight benchmark rate to 1.00%.1 GDP growth and employment trends remain strong, while inflation has stayed below the BoC’s 2.0% target. The Canadian 10-year government bond yield has followed an upward trend after hitting its lows in the second quarter. We believe higher rates are likely.

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Why we are not afraid of the Fed

The Federal Reserve (Fed) raised interest rates in March and is likely to raise them again twice this year, yet the financial markets have taken this news in stride. Why is this? Simply put, the Fed is behaving dovishly, considering the positive growth pattern we are seeing.

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Outlook 2017: Fixed income under a Trump administration


December 6, 2016
Subject | Active management | Invesco | Macro views | Outlook 2017

Invesco Fixed Income’s 2017 macro outlook is likely to be significantly influenced by the policy direction of the newly elected U.S. President Donald Trump and his administration. We believe there are a few key policy elements that will likely be implemented early in the Trump administration.

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What will drive markets after Trump’s victory?

In a surprising outcome, American voters elected Donald Trump as the next president of the United States. This result was viewed as unlikely by the market. In the short term, the market reaction may be driven by increased uncertainty. However, over the medium term, Invesco Fixed Income expects the economic impact of Trump’s policies to drive markets.

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