freilona wrote: ↑
Damn - “should’ve purchased (tm)” ZCM (BMO Mid Corporate Bond ETFj right away! Up 2.35% on this news I guess:
“In its regularly scheduled interest-rate announcement, the bank unveiled a Provincial Bond Purchase Program to buy up to $50-billion. It also announced a Corporate Bond Purchase Program, under which it will purchase up to $10-billion of investment-grade corporate bonds in the open market.”
Bank of Canada unveils new bond-buying programs in bid to support credit markets amid virus crisis
Although ZIC is up, too.. sigh
Poloz saying 1 to 5 year corporates. The bucket that generically has the least credit risk, but think again why this bucket. Bucket = street term for "maturity bucket" or a certain range of maturity dates. Think the same reason as my apple basket analogy. If you can keep the basket from overflowing, then there is room for other risk across the curve.MrMom wrote: ↑ @freilona ETF market getting ahead of the underlying. No details. Will it include Fins? Spread between Bid/Offers have not moved because this is all hypothetical. More thoughts here.
BTW, I'm in your camp now, had some posts removed. Probably for calling out the trolls.
I'll update this post with a chart of CDX spreads later.
A portfolio of select 5Y and 10Y NA (think US) credit. Lower spreads = bullish.
For the same sized basket, the risk gets fuller with longer dated and riskier big apples rather than shorter dated, smaller apples. Why might the basket be getting full? There's been some bond borrowings through this with the recent large TD NVCC deal as an example. Typically, investors will sell shorter dated credit to move out the curve. There are other reasons, but they may not be as important.
Conclusion: All else being equal, although they never are, the credit curve might steepen. 1 to 5 year corporate spreads tighter with > 5 year spreads wider.