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Bank of Canada Rate
June 5, 2024
6:59 am
gicjunkie
Ontario
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Rate dropped .25% to 4.75% today, June 5

June 5, 2024
7:14 am
Yatti420
Canada
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So optimistic lol. Inflation going up up up.

June 5, 2024
7:30 am
sk
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Mistake. Too early. Let's punish the savers. So borrowers can buy more.

June 5, 2024
7:55 am
lifeonanisland
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Seems like a mistake, but time will tell. Unhinging of CDN to USD has already started...that alone might do the opposite of easing inflation. Just appears to be a case of a somewhat fearful central banker, unduly influenced by the "economists" who shill for big banks, big real estate, etc., who are desperate to reignite the speculation/debt party.

June 5, 2024
8:12 am
AltaRed
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There has been nothing 'dramatic' yet about the decline in the loonie relative to the greenback in the last day or two.

It was at ~71 cents in Apr 2020, 62-63 cents in 2002, and actually spent most of its time <70 cents in the Jan 1998 - Apr 2003 period.

Anything above 70 cents going forward from here should be considered a 'win' given the state of our economy and declining productivity.

June 5, 2024
1:49 pm
smayer97
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Well, like I have said elsewhere, the reality is that the market had moved for months downward WELL ahead of any BoC direction, and as of a few days ago the market had moved just to the borderline that barely gave the BoC enough room to manoeuvre. BUT literally hours BEFORE the announcement, the market decided to move down further giving the BoC the room to then make the move to adjust the rate down. That is very clear from the review of the timing of all events. Meaning, the CoB is responding to the market.

June 5, 2024
3:48 pm
savemoresaveoften
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smayer97 said
Well, like I have said elsewhere, the reality is that the market had moved for months downward WELL ahead of any BoC direction, and as of a few days ago the market had moved just to the borderline that barely gave the BoC enough room to manoeuvre. BUT literally hours BEFORE the announcement, the market decided to move down further giving the BoC the room to then make the move to adjust the rate down. That is very clear from the review of the timing of all events. Meaning, the CoB is responding to the market.  

Sure .. must be.. if what u said is real, why is the mkt not pricing in 100% but only 80%…

June 5, 2024
6:13 pm
RetirEd
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Yatti420: The numbers and reporting I see indicate declining inflation. In fact, almost all of the inflation is concentrated in housing and fossil fuels.

RetirEd

June 5, 2024
10:05 pm
smayer97
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savemoresaveoften said

Sure .. must be.. if what u said is real, why is the mkt not pricing in 100% but only 80%…  

What do you mean?

June 6, 2024
4:43 am
mordko
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smayer97 said

What do you mean?  

If bond traders decide future rates then they should know what the forthcoming decision will be with 100% certainty. There shouldn’t have been 20% probability of “no change in rates” priced by the market.

In fact, the price of my bond ETF first dropped immediately before 10am and then jumped in immediate response to the announcement. The announcement must have been worded in such a way that rate change wasn’t obvious until a few minutes into the speech. Clearly the market misjudged what was about to happen and then adjusted once BoC announced the news. You can pinpoint the timing of the rate announcement by looking at yesterday’s bond chart.

June 6, 2024
6:35 am
AltaRed
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Maybe we should try and ignore the theory being spouted by mayer97 in yet another thread (this one) and keep it on the rails best we can. It has become repetitive and tiresome.

I noted that 'most' banks dropped their prime rate by COB yesterday by 25bp and I suspect some ISA savings rates will drop today or tomorrow by 25 bp as well.

June 6, 2024
7:34 am
Righand
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AltaRed said
Maybe we should try and ignore the theory being spouted by mayer97 in yet another thread (this one) and keep it on the rails best we can. It has become repetitive and tiresome.

I noted that 'most' banks dropped their prime rate by COB yesterday by 25bp and I suspect some ISA savings rates will drop today or tomorrow by 25 bp as well.  

RBC was quick to be one of the first to cut both their prime and RBF2010 by 25 bps.

IIRC, they are one of the first to cut but slow to raise the RBF2010 rates when rates do change on the upside.

June 6, 2024
7:58 am
Alexandre
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RetirEd said
Yatti420: The numbers and reporting I see indicate declining inflation. In fact, almost all of the inflation is concentrated in housing and fossil fuels.  

Receipt from my today's trip to grocery store says something different.

Earlier this year I said on this forum that I expect BOC not to increase rates anymore, also expect it to decrease rates at least once by mid-summer.

My reasoning was: political pressure. I said "inflation or no inflation, rates will go down."
Here we go.

June 6, 2024
8:56 am
Dean
Valhalla Mountains, British Columbia
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.
The ECB also cut their rates today

I suspect more Central Banks will soon follow, but the march to overall lower rates will most likely be a slow one.

Interesting times,

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

June 6, 2024
12:50 pm
savemoresaveoften
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Righand said

RBC was quick to be one of the first to cut both their prime and RBF2010 by 25 bps.

IIRC, they are one of the first to cut but slow to raise the RBF2010 rates when rates do change on the upside.  

if u watch it carefully, at every BoC meeting, RBC is always the first to announce the rate move to follow BoC. The rest of the banks are just lemmings and follow. In other words, RBC treasury department has the balls and size to be the big brother, the other banks, not so much or they just happy to be second tiers 🙂
if u also pay attention who is the last / second last to announce, its always the same names too :))

June 6, 2024
5:31 pm
AltaRed
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Bank of Canada expects the big banks to be prompt with prime rate changes....and they are, both up and down. I don't have the link but I read an article a few years ago when the banks didn't respond quickly and Bank of Canada took them to task. The prime rate is the basis for almost all other lending rates.

https://www.ratehub.ca/prime-rate

June 6, 2024
7:12 pm
savemoresaveoften
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AltaRed said
Bank of Canada expects the big banks to be prompt with prime rate changes....and they are, both up and down. I don't have the link but I read an article a few years ago when the banks didn't respond quickly and Bank of Canada took them to task. The prime rate is the basis for almost all other lending rates.

https://www.ratehub.ca/prime-rate  

During one of the rate cut few years ago, after the Boc lower rates by 25bps, banks only lower the prime rate by 17bps (if I remembered the exact level correctly). The BoC governer was pissed and phone calls were made to the big6 giving them $hit. That was the only time I can think of.

So yes, the BoC rate 100% drives the prime rate 1-to-1. Its not set in stone but bank treasuries know thats an unofficial rule they HAVE to follow.

June 7, 2024
6:42 am
Alexandre
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savemoresaveoften said
if u watch it carefully, at every BoC meeting, RBC is always the first to announce the rate move to follow BoC. The rest of the banks are just lemmings and follow.

Perhaps, or maybe these other banks simply have less efficient process flow which requires more levels of approvals for bank's rate change.

The end result is the same, right?

June 9, 2024
10:07 am
Lodown
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Alexandre said

savemoresaveoften said
if u watch it carefully, at every BoC meeting, RBC is always the first to announce the rate move to follow BoC. The rest of the banks are just lemmings and follow.

Perhaps, or maybe these other banks simply have less efficient process flow which requires more levels of approvals for bank's rate change.

The end result is the same, right?  

That is right. The less efficient process is, "let's see what RBC does". sf-confused

June 9, 2024
11:39 am
savemoresaveoften
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Lodown said

That is right. The less efficient process is, "let's see what RBC does". sf-confused  

yup and even the bank treasury at the other banks admit it. I wont say my source...

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