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The five-year Canada yield popped up today to 3.88%%. This has been attributed, as ususal, to fear of the Fed:

North American stocks ended the session lower and benchmark Treasury yields continued their ascent on Thursday after investors weighed generally upbeat earnings against the prospect that the Federal Reserve could hold firm on its aggressive policy for longer than they had hoped.

Canada’s TSX and all three major U.S. stock indexes reversed an earlier rally, turning red after remarks from Philadelphia Federal Reserve President Patrick Harker suggested the central bank will “keep raising rates for a while.” Harker’s comments also helped support the 10-year Treasury yield’s climb past 14-year highs.
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Financial markets have now fully priced in yet another 75 basis point interest rate hike from the Federal Reserve when it meets next month, according to CME’s FedWatch tool.

A spate of mixed quarterly corporate results and economic indicators provided some evidence of economic slowdown, but a dip in jobless claims showed the Fed’s aggressive campaign of interest rate hikes has so far had minimal effect on the tight U.S. labor market.
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Benchmark Treasury yields resumed their rise after economic data appeared to confirm the Fed is unlikely to relent in its aggressive campaign to rein in inflation.

Benchmark 10-year notes last fell 25/32 in price to yield 4.2346%, from 4.129% late on Wednesday.

The 30-year bond fell 49/32 in price to yield 4.231%, from 4.127% late on Wednesday.

Oh, and what’s ‘er name resigned as UK PM:

Then-chancellor of the exchequer Kwasi Kwarteng, who shared Ms. Truss’s economic outlook, unveiled a mini-budget on Sept. 23 that included sweeping tax cuts but no detailed plan spelling out how the measures would be financed. That spooked investors and drove the British pound to a record low against the U.S. dollar. It also pummelled prices for government bonds, which in turn drove up the cost of mortgages.

Ms. Truss faced a chorus of criticism and began backtracking. First she scrapped plans to cut the top income tax rate to 40 per cent from 45 per cent. Then, she fired Mr. Kwarteng and replaced him with Jeremy Hunt, who started dismantling almost all the tax cuts in the mini-budget.

With her economic plan in disarray and almost all of her campaign promises broken, Ms. Truss vowed to fight on, but her efforts to address her many U-turns fell flat. Public opinion polls put the Conservatives 30 points behind the Labour Party, and one survey found that just 10 per cent of voters approved of Ms. Truss’s performance in office.

You can only get away with wingnut-scale tax cuts if you’re the richest country on Earth. And there’s only one of those … and cracks in the edifice are slowly spreading …

This entry was posted on Thursday, October 20th, 2022 at 8:02 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.