It was interesting to watch the markets react earlier today as Mr. Poloz and Mr. Bernanke each gave their speech.
At one point today, Canada’s 5-year government bond fell -8.3% from a high of 2.16 to 1.98.
What’s so important about the 5-year government bond? Bond yields usually precede changes in fixed mortgage rates. A look at the chart below shows the bond yield rise and explains why mortgage fixed rates have been increasing over the past several months as well.
Of course today’s -8.3% intraday drop doesn’t suggest we’ll immediately be seeing any changes to fixed-rate mortgages, but it’s something to keep an eye on.
If you want to follow bond yields, here are some good sites: