Just like the weather man, economists can be wrong as well!!
After the quick jump in interest rates by the big banks forseeing their "costs" rising as the bond yields climbed to 3.00%, we now have a easing this week. We have had a number of lenders drop their 5 year rates by 15 basis points. Why?
GREECE! With the crisis is Europe unfolding in the financial markets we have had a flight back to North American assets. Have you noticed the stronger US dollar? This is because investors who are worried about their exposure to European investments, are they selling them and moving back into American and Canadian dollars. A very popular, "safe" investment is to buy our government bonds. This has led to a lowering of 5 year government bond yields..
http://www.bloomberg.com/apps/quote?ticker=GCAN5YR%3AIND
How low will they go? When will they move back up? These days that is like picking the winning 6/49 numbers! But if you are shopping now or have any mortgage renewal or refinancing to do get on with it!
Regards,
Peter McKinnon
peter_mckinnon@centum.ca
http://www.peterlmckinnon.com/
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