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Invesco Canada blog

Insights, commentary and investing expertise

Invesco Fixed Income (IFI)

Up, up and away: BoC hikes rate


July 12, 2017
Subject | Institutional | Invesco | Invesco Fixed Income (IFI) | Macro views

Following recent upbeat comments, the Bank of Canada (BoC) announced today that it would hike the overnight target rate to 0.75% from 0.50%. This is the first rate hike since 2010, as the BoC has become confident that the current “above potential growth” will continue, leading it to take back one of two emergency rate cuts enacted in 2015.

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Interest-rate outlook: Expect rising rates in Canada


July 4, 2017
Subject | Institutional | Invesco | Invesco Fixed Income (IFI) | Macro views

In June, Canadian 10-year government bond yields bounced off their lowest levels of the year, to 1.63%, as first quarter growth came in above expectations and central banks express confidence that monetary policy has accomplished it’s goal.1 The Bank of Canada (BoC), in particular, is less worried about uncertain U.S. trade policy and another substantial drop in oil prices, and becoming worried that excess capacity is beginning to dwindle. Their optimism may prove to be premature as inflation remains very low, so we are watching its stance closely. We expect interest rates in Canada to rise from current levels.

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Currency outlook: Strong global growth mixed for U.S. dollar


June 29, 2017
Subject | Institutional | Invesco | Invesco Fixed Income (IFI) | Macro views

The Canadian dollar has been in a slow decline over the last year, but has shown strength recently. As growth rebounded in the first quarter, the Bank of Canada (BoC) appears to be becoming concerned that excess capacity may be declining faster than they would like. While oil prices appear to have peaked for the year due to U.S. oil production, there has been little effect on the currency. We remain underweight the Canadian dollar due to the overleveraged Canadian consumer, but we are monitoring the recent hawkish BoC rhetoric closely.

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Full steam ahead: Fed hawkish, hikes rates


June 14, 2017
Subject | Institutional | Invesco | Invesco Fixed Income (IFI) | Macro views

The U.S. Federal Open Market Committee (Fed) hiked its key interest rate by 0.25% today, to a target range of 1% – 1.25%. While the hike was fully expected by the market, recent inflation prints, such today’s May CPI falling by -0.1%, had left an expectation this would be a dovish hike. As it turns out, the Fed announcement was hawkish as it formally announced the details of their balance sheet normalization.

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Will U.K. election surprise lead to “softer” Brexit?


June 9, 2017
Subject | Institutional | Invesco | Invesco Fixed Income (IFI) | Macro views

One year after the Brexit referendum and two years after the Scottish independence referendum, U.K. voters have surprised the country and the markets once again, with a dramatically different election outcome than suggested by almost every poll: Instead of an enlarged Conservative Party majority, which Prime Minister (PM) Theresa May wanted to see, the result of the June 8 general election is a “hung parliament” – no party controls a majority.

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Looking beyond the active-passive debate


June 7, 2017
Subject | Active management | Commodities | Economics | ETFs | Industry views | Institutional | Invesco | Invesco Fixed Income (IFI) | Macro views | PowerShares | Smart beta | Trimark

Recently, one of Invesco’s funds – Trimark International Companies Fund – was singled out for praise as an example that true active management can outperform. While the kudos were well-deserved for the team, it appeared as part of a commentary that was otherwise unsympathetic to active management.

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