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  • Dec 14th, 2017 9:18 pm
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Deal Fanatic
Jan 27, 2006
6648 posts
1784 upvotes
Vancouver, BC
Jungle wrote:
Dec 7th, 2017 11:36 am
Does anyone know how much the 3 months treasury will go up when The Fed hikes rates next week?
3 months is a very short time frame... since the Fed's hike will affect overnight lending rates, the 3 month will probably move close to the size of the hike but not more.
Deal Addict
May 31, 2007
4442 posts
1543 upvotes
craftsman wrote:
Dec 7th, 2017 1:50 pm
3 months is a very short time frame... since the Fed's hike will affect overnight lending rates, the 3 month will probably move close to the size of the hike but not more.
Thanks I started to keep any eye on the yield curve between 3 months and 10 year treasury as recession monitor. no danger yet but this cycle sure is maturing.
Deal Addict
Jan 20, 2016
1434 posts
554 upvotes
Houston, TX
Jungle wrote:
Dec 7th, 2017 2:47 pm
Thanks I started to keep any eye on the yield curve between 3 months and 10 year treasury as recession monitor. no danger yet but this cycle sure is maturing.
https://www.treasury.gov/resource-cente ... ation.aspx

Flattened compared a year ago, for example. But quite far from 2006-2007 so far (1.5% in absolute numbers and ~250% in relative ones between 1mo and 10/30y)
Make the Trudeau drama teacher again!
Deal Fanatic
Jan 27, 2006
6648 posts
1784 upvotes
Vancouver, BC
Jungle wrote:
Dec 7th, 2017 2:47 pm
Thanks I started to keep any eye on the yield curve between 3 months and 10 year treasury as recession monitor. no danger yet but this cycle sure is maturing.
According to one money manager on CNBC, once the yield curve flattens, he expects a recession to occur withing 12 to 18 months.
Deal Addict
Dec 27, 2006
1126 posts
290 upvotes
NotRobot wrote:
Dec 7th, 2017 8:27 pm
Inverted yield curve is often used as a recession signal. More than a few see that happening next year. See article on Bloomberg.

https://www.bloomberg.com/news/articles ... t-outlooks
Here is another take and I’ve heard this tossed around a few times.

https://www.avivainvestors.com/en-nl/in ... ssion.html

And here is another take..check out the date!

https://www.euromoney.com/article/b1321 ... -the-world



Time will tell..
Deal Addict
Nov 14, 2010
1048 posts
167 upvotes
Deputy chief economist at CIBC World Capital Markets: BoC could use Trump presidency as excuse to cut rates

Very interesting take from one of the nation's respected financial economists. Trump's a wildcard on NAFTA, and if he decides to pull the plug entirely or change it significantly, could have incrediby great deflationary pressures on Canada. Not only would exports be affected enormously, but consider all of the professional labor that travels south because analogous Canadian industry has either withered away long ago or does not have nearly the size to absorb all of these skilled people. It would even worsen the current labor glut that we have, which would be another deflationary force on the total inflation rate.

In short, BoC rate cuts are a likely possibility in the future considering all of the above and the further comments from Tal.
Deal Fanatic
Jan 27, 2006
6648 posts
1784 upvotes
Vancouver, BC
Metagame wrote:
Dec 7th, 2017 8:40 pm
Deputy chief economist at CIBC World Capital Markets: BoC could use Trump presidency as excuse to cut rates

Very interesting take from one of the nation's respected financial economists. Trump's a wildcard on NAFTA, and if he decides to pull the plug entirely or change it significantly, could have incrediby great deflationary pressures on Canada. Not only would exports be affected enormously, but consider all of the professional labor that travels south because analogous Canadian industry has either withered away long ago or does not have nearly the size to absorb all of these skilled people. It would even worsen the current labor glut that we have, which would be another deflationary force on the total inflation rate.

In short, BoC rate cuts are a likely possibility in the future considering all of the above and the further comments from Tal.
That might happen... however, pulling out of NAFTA isn't a simple overnight thing. Here's an article that summarizes how ugly and long it might take - http://www.huffingtonpost.ca/2017/08/24 ... _23163682/.

The BOC would be well advised to create some breathing room between now and if NAFTA does get cancelled to boost the economy - a half point here and there may not be enough in the short term.
Deal Expert
User avatar
Oct 26, 2003
27317 posts
1778 upvotes
Winnipeg
craftsman wrote:
Dec 8th, 2017 2:32 am
That might happen... however, pulling out of NAFTA isn't a simple overnight thing. Here's an article that summarizes how ugly and long it might take - http://www.huffingtonpost.ca/2017/08/24 ... _23163682/.

The BOC would be well advised to create some breathing room between now and if NAFTA does get cancelled to boost the economy - a half point here and there may not be enough in the short term.
how bad would cancelling NAFTA be?
Deal Addict
Jan 20, 2016
1434 posts
554 upvotes
Houston, TX
Metagame wrote:
Dec 7th, 2017 8:40 pm
Deputy chief economist at CIBC World Capital Markets: BoC could use Trump presidency as excuse to cut rates

Very interesting take from one of the nation's respected financial economists. Trump's a wildcard on NAFTA, and if he decides to pull the plug entirely or change it significantly, could have incrediby great deflationary pressures on Canada. Not only would exports be affected enormously, but consider all of the professional labor that travels south because analogous Canadian industry has either withered away long ago or does not have nearly the size to absorb all of these skilled people. It would even worsen the current labor glut that we have, which would be another deflationary force on the total inflation rate.

In short, BoC rate cuts are a likely possibility in the future considering all of the above and the further comments from Tal.
The "problem" here is that Trump could tear NAFTA by himself. He would need Congress approval on that, and it would be tons of courts roadblocks as well.
As scarecrow, scapegoat (for angry voters), negotiation point and just an excuse "end of NAFTA" is a good thingt. Not so in real life.
Make the Trudeau drama teacher again!
Deal Fanatic
Jan 27, 2006
6648 posts
1784 upvotes
Vancouver, BC
divx wrote:
Dec 8th, 2017 2:47 am
how bad would cancelling NAFTA be?
In the long term, not too much as things and business will adjust. In the short term during the adjusting, very bad as it will change the way how things are done! A good example is a car can potentially cross back and forth across the border 7 times during the manufacturing process - right now, that's smooth and integrated... think what would happen if you needed more paperwork and inspections as well as duties on various parts each time it crossed over?
Deal Addict
May 31, 2007
4442 posts
1543 upvotes
craftsman wrote:
Dec 8th, 2017 1:28 pm
In the long term, not too much as things and business will adjust. In the short term during the adjusting, very bad as it will change the way how things are done! A good example is a car can potentially cross back and forth across the border 7 times during the manufacturing process - right now, that's smooth and integrated... think what would happen if you needed more paperwork and inspections as well as duties on various parts each time it crossed over?
Majority of trade is done with one partner. (USA)
We need to sell to others. (growing asian markets)

Pipelines being cancelled didn't help this.
[OP]
Deal Addict
Feb 22, 2011
1876 posts
1693 upvotes
Toronto
Jungle wrote:
Dec 8th, 2017 2:01 pm
The Gluskin Sheff + Associates chief economist David Rosenburg thinks there will be no rate hikes next year, (lol)

https://www.bnn.ca/too-much-uncertainty ... g-1.936164

He also questions the employment data and says "it's a survey"
Seems like a reasonable prediction based on;

"...nderlying inflation so far below target and your central bank talking about uncertainty..."
"...[E]vidence that the central bank will proceed with caution into 2018, including coming mortgage stress tests, regulations that will force the banks to keep more capital on their balance sheets and the minimum wage increases slated to take effect in Ontario, Alberta and Quebec."

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