Inversion of the Canadian yield curve

Canadian government bond yields:

3-month: 1.63%
1-year: 1.68%
2-year: 1.55%
5-year: 1.48%
10-year: 1.59%

This would be one explanation why those 5-year rate reset preferred shares aren’t doing so good price-wise.

The 5-year yield also dropped under 1% between June 2015 to October 2016 – these were not happy times for rate resets.

The most obvious safety mechanism appears to be cash – but is one willing to endure the pain of taking a 2% pre-tax return?

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Hello,

Do you think the inverted yield curve is signalling a recession in the next year?

Thanks,
Rob