Bank of Canada Rate Hike

[errolanderson]

According to the realtors a 1/4% increase takes 2.75 % out of a persons purchasing power.

Interesting, . . . now times by two (2) . . . and maybe three (3) into October.

[ajl]

I doubt that there will be any further increases now. This was just Octobers rise a month early. Unless China is going broke and having to sell foreign securities like Canadian bonds and US treasuries. Something to keep an eye on. When that happens 10% interest is back in a flash. Remember the 1980s. China has more mal investment than anywhere else on the planet ie ghost cities and piles of commodities for the sole purpose of speculation.

[macdon02]

30 yr bonds are close to resistance and running out of time. I'm looking for a turn in the next couple weeks

[sumdumguy]

I doubt that there will be any further increases now. This was just Octobers rise a month early. Unless China is going broke and having to sell foreign securities like Canadian bonds and US treasuries. Something to keep an eye on. When that happens 10% interest is back in a flash. Remember the 1980s. China has more mal investment than anywhere else on the planet ie ghost cities and piles of commodities for the sole purpose of speculation.

Wouldn't 10 percent interest slow down the economy? Rather abrupt ending to the insanity but an ending anyway.

[macdon02]

Wouldn't 10 percent interest slow down the economy? Rather abrupt ending to the insanity but an ending anyway.

Any outsider is getting blitzed on bonds by the currency effect as their home currency is appreciating against any USD asset. Either currency reverses or they'll cry uncle right quick. Never under estimate what the USD is doing its the key to capital flow and where markets are headed. US assets are appearing cheap and why not hedge your home currency against the reserve? It's taken more places then Visa. There's an outside chance CAD goes to 88 but 85 ish more likely. At that point the majority will be thinking par and caught on the wrong side. This hunt for taxes is gonna get worse as exports will come to a standstill. Cue the pension crisis. We are entering the perfect storm imo.

[macdon02]

Realize today's 1/4% hike sounds like no big deal, but there have now been two (2) rate hikes recently totalling 1/2%. Consumers are now under huge debt pressure with many living paycheck-to-paycheck. This recent 1/2% increase has a sizeable impact on those caught in the debt squeeze (IMO).

Calgary real estate values are definitely in-decline right now . . . .

We've also effectively doubled the interest cost on govt debt

[errolanderson]

It's beginning to sound like both the U.S. Federal Reserve and the Bank of Canada may suspend further rate hikes in 2017. Many retail bankruptcies stateside right now, consumerism and housing appear slowing. Cdn 4th quarter GDP may slow considerably in the 4th quarter (in our view).

But Dow Jones may mark its 42nd historic record high for 2017. Investors remain uninspired over these amazing central bank manipulated U.S. equity market gains. Now the Fed will possibly announce the beginning of the massive unwind of the balance sheet (selling bonds). This will be an incredible financial market balancing act by the Fed not to knock over the apple cart.

VIX (volatility) remains spooky quiet. Some observations . . . .

[danny W1M]

The VIX that I've been following, not long ago split again, 1 for 4 ! Not 4 for 1, but 1 for 4.

Hitting record low again after signaling a triple bottom at the end of July/early August.

[URL="https://ca.finance.yahoo.com/chart/VXX?ltr=1#eyJtdWx0aUNvbG9yTGluZSI6ZmFsc2UsImJvbGxp bmdlclVwcGVyQ29sb3IiOiIjZTIwMDgxIiwiYm9sbGluZ2VyTG 93ZXJDb2xvciI6IiM5NTUyZmYiLCJtZmlMaW5lQ29sb3IiOiIj NDVlM2ZmIiwibWFjZERpdmVyZ2VuY2VDb2xvciI6IiNmZjdiMT IiLCJtYWNkTWFjZENvbG9yIjoiIzc4N2Q4MiIsIm1hY2RTaWdu YWxDb2xvciI6IiMwMDAwMDAiLCJyc2lMaW5lQ29sb3IiOiIjZm ZiNzAwIiwic3RvY2hLTGluZUNvbG9yIjoiI2ZmYjcwMCIsInN0 b2NoRExpbmVDb2xvciI6IiM0NWUzZmYiLCJyYW5nZSI6IjNtby J9"]https://ca.finance.yahoo.com/chart/VXX?ltr=1#eyJtdWx0aUNvbG9yTGluZSI6ZmFsc2UsImJvbGxp bmdlclVwcGVyQ29sb3IiOiIjZTIwMDgxIiwiYm9sbGluZ2VyTG 93ZXJDb2xvciI6IiM5NTUyZmYiLCJtZmlMaW5lQ29sb3IiOiIj NDVlM2ZmIiwibWFjZERpdmVyZ2VuY2VDb2xvciI6IiNmZjdiMT IiLCJtYWNkTWFjZENvbG9yIjoiIzc4N2Q4MiIsIm1hY2RTaWdu YWxDb2xvciI6IiMwMDAwMDAiLCJyc2lMaW5lQ29sb3IiOiIjZm ZiNzAwIiwic3RvY2hLTGluZUNvbG9yIjoiI2ZmYjcwMCIsInN0 b2NoRExpbmVDb2xvciI6IiM0NWUzZmYiLCJyYW5nZSI6IjNtby J9[/URL]

[errolanderson]

quick update . . . Fed minutes released at noon.

No rate hike now, but Fed governors talk of three (3) rate hikes in 2018. Go figure.

Fed will begin unwinding balance sheet starting October (selling bonds) . . . $600 billion per year.

Loonie getting pounded right now as result of potential U.S. rates hikes into 2018.

Dow Jones yet another record high today . . . .