Curve Your Enthusiasm

The most recent Debt Management Strategy (DMS) raised the possibility that the Canada Mortgage Bond (CMB) program may be terminated, and folded into the GoC market. This is an extremely important development to the Canadian fixed income market, and to speak on the potential implications, Ian is joined this week by Gianluca Gargano, Managing Director and Head of Government Credit at CIBC Capital Ma...

The extreme volatility this week warrants some serious discussion, and Ian is joined by Craig Bell for this episode. The duo begin discussing the rapid series of events that culminated in one of the most volatile days for interest rates since the 1980s. Craig provides his view on what this all means for monetary policy, while Ian introduces two potential shoes left to drop that suggest the coast i...

Ian and Jeremy begin the episode by discussing the FOMC meeting from last week. Jeremy spends some time dissecting the disinflationary narrative used by Chairman Powell, while Ian discusses the extremely strong data which came out after the meeting. The duo do a victory lap as many of the trading themes discussed in the prior episode ended up working quite well, and the co-hosts discuss the drivin...

The first CYE episode of 2023 sees Ian joined by Jeremy Saunders, and the conversation starts with a discussion on global macro shifts. Stronger global growth outside the United States is an unexpected development, and the duo discuss what it means for global bond yields. Jeremy asks why the BoC spent so much optionality so early into the year, while Ian talks about the market implications of a co...

Ian is joined this week by Brenden Donaher, and the duo begin the episode by discussing Bank of Canada pricing for the upcoming meeting. Ian walks through various scenarios around the meeting, and Brenden provides his view on what that means for 2023 pricing. Brenden introduces the idea that the USD still remains the most important factor driving Canadian short-end pricing, despite some idiosyncra...

Ian and Andrew discuss their expectations for the Bank of Canada interest rate decision next week. The duo walk through the reasons why the Bank will need to hike by another 75.0bps next week, and look at the most likely path of short-rates over the rest of the year. Ian talks about his favorite trades going into the release, noting that the forward expectations for BoC policy are too flat. Andrew...

Ian is joined by Jeremy Saunders this week, and the duo begin the episode discussing the Bank of Canada rate decision this past week. Jeremy discusses his view on terminal rates becoming more ‘bounded’, while Ian introduces the concept of a higher lower bound. Both have profound implications for the shape of the yield curve compared to prior cycles. The hosts take some time to walk through what tr...

Ian and Andrew discuss the latest Canadian GDP numbers, noting how the deceleration in growth is coming from all the ‘wrong’ places when it comes to slowing inflation. Ian talks about how slowing growth impacts the yield curve, noting the differences between slowing from an above potential to a below potential rate. Andrew shares his view on the Bank of Canada rate decision next week, and provides...

Ian is joined this week by Josh Kay, and the duo kick-off the episode discussing the Bank of Canada. With a 75 bps hike all but set in stone, the question is what should their next move be and should this matter given what is currently priced? Ian discusses his view on the ‘noncession/recession’ which will be challenging to trade, while Josh provides his view on what the move in rates means for cr...

Ian is joined this week by Jeremy Saunders, and the duo start the episode by looking at the shape of the Canada and U.S. yield curves relative to what is priced for monetary policy in each region. Ian discusses why he views the recent bond market rally to be technical, while Jeremy provides his take on why it has been more fundamentally based. Over the balance of the episode the team discuss the o...

Ian is joined this week by Paul Jenkin, and the duo kick-off the episode discussing their take of the FOMC meeting. The largest hike from the Fed since the mid-90s didn’t come entirely as expected, with a hawkish set of forecasts pitted against a dovish press conference. Paul discusses the reasons he expects policy rates to set higher than current market pricing, and what that means for bank portf...

Ian and Andrew start the episode by discussing Friday’s data deluge, particularly the red-hot inflation reading in the United States. Andrew talks about the implications for Canada based on the drivers of U.S. CPI strength, noting that both the near-term peak and the end-of-year resting spot have now increased. The duo spend a lot of time talking about the options for the Bank of Canada, and intro...

The scorching hot CPI report has created yet another shock for the market, and the probability of an even more ‘forceful’ response from the Bank of Canada seems warranted. In this episode, Ian and Andrew do a deep dive on the latest report and talk about the many methodology adjustments StatsCan is making to the basket. The co-hosts take some time to go over the new forecasts presented in the MPR...

In the 50th episode of Curve Your Enthusiasm, Ian and Andrew begin the show discussing the strength in the recent Canadian GDP numbers. Ian talks about data sensitivity and the bond market, while Andrew highlights why he thinks the path to terminal matters. The co-hosts both outline why they think the Fed is more likely to take short-run terminal above long-run neutral, and Andrew discusses the wo...

The Bank of Canada (BoC) hiked interest rates for the first time since 2018, and the episode begins with a dissection of the statement. This week, Ian is joined by Andrew Grantham, Senior Economist in CIBC Economics. Once the pair establish what was surprising from the BoC, they spend some time discussing why C$100.0 oil in 2022 has a different impact than C$100.0 oil in 2014. Andrew discusses his...

Ian is joined this week by Josh Kay, and the duo begin the episode talking about the benefits, and dangers, of a non-standard sized hike. Ian discusses the required trade off between a higher terminal rate and a faster pace of hikes and why the curve is currently ‘trapped’. Josh spends some time discussing how credit markets are reacting to higher interest rates, while also taking a look back at r...

On this episode of CYE, Ian and Nick begin this episode discussing whether or not markets are priced for peak macro conditions. Ian talks about the importance of the BoE and ECB meetings on the global stock of negative yielding debt, and how that dynamic may interrupt traditional flattening trends into a hiking cycle. Nick discuss productivity trends within the context of where the market is prici...

Ian is joined this week by Jeremy Saunders from CIBCs XVA trading group. The duo kick-off the episode by discussing the Bank of Canada and Fed meeting this week, looking at the primary reasons why the Bank decided to delay the first hike until March. Jeremy discusses the importance of preserving forward guidance as a policy tool, and contrasts the messaging between the two post-meeting press confe...

Ian is joined this week by Craig Bell, and the duo cover a lot of ground heading into the Bank of Canada interest rate decision next week. The episode begins with an in-depth discussion on why the Bank can credibly delay rate hikes in January. Craig goes on to discusses the path ahead for swap spreads, while Ian spends some time walking through what balance-sheet rolloff will look like in Canada,...

Ian is on the hunt for a new co-host, and is joined this week by Nick Exarhos to discuss a host of themes that matter right now for the bond market. The duo begin their discussion on what quantitative tightening (QT) would look like from the Bank of Canada, and the key differences we should expect relative to the Fed. Nick discusses the impact of fiscal drag in the United States on the growth outl...

In the final episode of 2021, Ian & Royce discuss the widened uncertainty related to new COVID variants. Royce discusses his view on the recent Canadian data, both GDP & jobs, while Ian opines on the potential for the Bank of Canada to deliver earlier-than-expected rate hikes. The two hosts go back-and-forth about the most optimal policy sequencing, specifically whether or not central bankers shou...

Ian & Royce begin the episode this week discussing the most recent Labour Force Survey. They conclude that while the economy has reached a milestone in recovering all of the jobs lost during the pandemic, that’s not a sign of “mission accomplished”. Ian then takes a deep breath and speaks about the recent move in Canadian short rates, and why the profile for the Bank of Canada has been so aggressi...

The recent increase in COVID-19 cases is showing up in the data in different ways, in different regions. Royce describes why inflation surprises shouldn’t be taken at face value, while growth surprises aren’t as concerning as the bond market is suggesting. Ian walks through his expectation for the FOMC meeting next week, and provides a framework for thinking about how the Fed’s taper will impact b...

Royce and Ian take stock of the recent FOMC meeting, and discuss what new information they heard from the Fed.  Royce explains the key drivers of inflation differentials between Canada and the United States, while Ian vents his frustration over the lack of response in the bond market.  The new repo facilities are discussed within the context of how the sequencing of QE impacts the timing of U.S. r...

Royce and Ian take the pulse of the reflation trade. Ian discusses the reasons that some investors are calling the trade dead. Royce talks about why the base case economic outlook remains bright for North America, despite some downside risks that are on the rise. They close the podcast by discussing the expected path for the Bank of Canada’s balance sheet. Hosted by Simplecast, an AdsWizz company....