August 18th – Canadian 5 yr bond yields -.08bps to 2.50. The spread, based on 5 yr rate of 4.29% is 1.79.
August 17th – Canadian 5 yr bond yields -.03bps to 2.58. The spread, based on 5 yr rate of 4.29% is 1.71.
August 13th – Canadian 5 yr bond yields -.05bps to 2.61. The spread, based on 5 yr rate of 4.29% is 1.68.
What does this mean? Essentially, the yield, or rate of return on a bond, can be read through a yield curve: a pattern of yields on bonds. The increase in bond yields is what experts watch. If the bond yield continues to increase, the spread will continue to shrink and this could be a trigger for interest rates to rise. Typically, lenders are looking for a new spread between 1.80 and 2.00.
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