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Prime Rate Predicted To Rise |
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Canada’s key lending rate is headed at least 1/4 point
higher in eight days…that is, if the financial markets are right.
Here’s
the latest…
- Friday’s eye-popping employment report has lifted the odds of a
quarter-point hike to 96%, based on the price of overnight index swaps.
- Bankers' acceptance (BA) yields have averaged 20
bps above the overnight rate since 1992. Their current 0.94%
level also points to a 25 bps rate increase.
- Every last one of Canada's primary securities dealers is now
predicting a 25 basis point hike this month, according to a Reuters
poll on Friday. Not only that, but every single dealer also forecasts another
rate increase in September.
If the overnight rate does rise to 0.75% on July 20, prime rate will likely move to 2.75%. The last time
prime was above 2.50% was February 2009.
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