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?
Hello,
Do you think the inverted yield curve is signalling a recession in the next year?
Thanks,
Rob
I don’t have an opinion of it either way, but it does signal a relatively large degree of pessimism, at least as far as the bond market is concerned.
Good overview on the inversion
http://econbrowser.com/archives/2019/05/yield-curve-inversion