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Send us Fan Mail Looking at the financial market returns for the third quarter and year-to-date 2022, there was no obvious place to hide as all asset classes suffered. The carnage in fixed income markets is the worst seen in most of our lifetimes.

Send us Fan Mail Central banks have created far more money than necessary for actual economic activity and the result is the highest inflation in 40 years. Interest rates are up, and the financial markets have shuddered, shattered and fallen precipitously in price. Listen here in the July Market Observer.

Send us Fan Mail History books will show the official end of emergency monetary policy accommodation to offset the Covid-19 pandemic came on March 2nd and 16th when the BOC and the Fed raised overnight rates. In reality, the recalibration of bond markets started well beforehand, in response to inflation, and in anticipation of central bank action.

Send us Fan Mail The global bond market is experiencing the violence of sharply rising yields. Loose fiscal policy and pandemic government income supports combined increasing demand with reduced supply. Prices are soaring to levels not seen in the over 40 years since the high inflation 1970s.

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Send us Fan Mail Have central bankers done enough to get inflation under control? We believe that monetary policy and the credit cycle are powerful forces, but we suspect that things on the inflation front will be a lot more difficult than the fashionable market crowd suspects.

Send us Fan Mail The year began with swift optimism. Equity markets quickstepped higher, while credit spreads swung tighter. Buyers lined up to purchase new bonds from both investment grade and non-investment grade issuers. In sequence, investors who were knocked down by one of the worst years of their careers bounced back up and danced.

Send us Fan Mail We continue to see that inflation hopes are springing eternal in the world’s bond markets in the Spring of 2023. The bond market is moving manically between elation that nagging inflation has finally been vanquished, and fears that it has not. It depends on the day, the hour, or even the minute after an “important number” is released, but bond traders continue to focus on the Fede...

Send us Fan Mail The recent rise in Canadian bond market yields is something that bond investors have seldom seen in their professional lifetimes, and never for a sustained period. After hitting generational lows from 2010 to 2020 when central bankers became enamoured with ZIRP (Zero Interest Rate Policy) and QE (Quantitative Easing), there was nowhere to go but up for bond yields!

Send us Fan Mail The first quarter financial market bruising exploded into full blown carnage by mid-year as second quarter returns pushed deeper into negative territory. Several markets recorded double digit losses, as investors fled the riskiest assets.