Week Ending April 12, 2026

BoC Holds at 2.25% While Fed Signals Extended Restrictive Policy

Policy Rates

🇨🇦
0.00%
BoC
🇺🇸
0.00%
Fed
🇪🇺
0.00%
ECB
🇬🇧
0.00%
BoE

At a Glance

Updated Just now
🇨🇦 10Y
0.00%
0bps
🇺🇸 10Y
0.00%
0bps
IG Spread
0bps
Neutral
HY Spread
0bps
Tight
Duration: Cautious
Credit: Neutral
Quality: Positive

Key Takeaways

📈
Rates: Policy divergence intensifies with Fed maintaining restrictive 3.75% while BoC holds at 2.25% amid recession concerns. Canadian 10Y rally extends to 3.46% as 2s10s curve steepens to +67bps on growth downgrades per TD Economics.
🏦
Credit: Investment grade spreads tighten to 83bps from 87bps as fundamental stability offsets duration concerns. Canadian financials maintain premium valuations with Big 6 banks averaging 15.8% Tier 1 capital ratios per RBC analysis.
🛡️
Hedging: Barbell strategies dominate with institutions targeting 2-3Y and 8-10Y maturities while reducing 5-7Y exposure. Quality rotation accelerates with government allocations averaging 72% across mandates on late-cycle positioning.

Significant Moves

↑
US 10Y Treasury+11bps
4.19%→4.26%

Reflects growing market concern about inflation persistence limiting Fed easing

↓
IG Credit Spreads-6bps
79bps→73bps

Further tightening to decade lows increases vulnerability to reversal

View Shifts

TD
TD Securitiesoutlook
Constructive on duration→Constructive with hawkish B...

Added caution on BoC policy trajectory while maintaining duration preference

BL
BlackRockcredit
Agency MBS very cheap→Agency MBS significantly un...

Increased conviction on MBS vs corporate credit relative value opportunity

New Calls

NEW

Scotiabank projects 50bps BoC hikes to 2.75% by H2 2026 as inflation persistence emerges

NEW

PIMCO increases conviction on agency MBS as 'significantly undervalued' vs IG corporates

NEW

Goldman Sachs maintains two Fed cuts in 2026 despite market pricing just one

View Full ReportCharts, analysis, and portfolio implications

Previous Issues

View all →

April 5, 2026

Duration Caution Persists as Central Banks Signal Extended Policy Divergence

→

March 29, 2026

Duration Caution Deepens as Global Yields Climb on Persistent Inflation

→

March 22, 2026

Yield Curves Steepen as Policy Divergence Deepens Globally

→

March 15, 2026

BoC Cuts 25bps to 2.00% as Canada-US Rate Gap Widens

→