Our southern neighbour saw initial jobless claims surge on Thursday, stealing the spotlight from U.S. inflation. And the latter rose in its own right—by the most in seven months.

Wednesday's eye-opening pullback in U.S. wholesale prices bolstered expectations of Fed cuts. Attention now swivels to Thursday’s U.S. CPI. It’s the last piece of the inflation puzzle before Team Powell sets the path for the planet’s most-watched policy rate.

Tuesday was Dullsville in Canada's rate market. Traders resigned themselves to the sidelines, waiting for more interesting data. Unfortunately, today's revised U.S. jobs numbers did nothing to assuage their concerns.

Monday's markets still felt the reverb from Friday's wretched jobs reports. The final determinant may be Thursday's U.S. CPI report, but at least one Fed cut is already baked into the cake.

If there's one MortgageLogic.news story that should be circled, highlighted, and laminated, this is it.

What follows is a cornerstone of mortgage planning, and that's no exaggeration, because by ignoring it, a mortgage advisor has failed their clients. No ifs, ands, or buts—just a lot of awkward silence at renewal time.

It's a concept that baffles all too many in our business, until someone translates it into plain English. Well, here is that explanation, in a way you've never heard before, offered in the hope it sharpens your ability to serve clients.

Friday changed the outlook

We'll start with last week's rate action because it's illustrative of a key point.

Friday's employment train wreck sent yields tumbling and cranked the sentiment knob almost all the way to "#dovish#."

That’s quite a pivot from the recent focus on inflation and fiscal overspending.

In fact, it wasn't long ago that overnight index swaps (#OIS#) weren't even pricing in half a rate cut, let alone the 2+ priced in today.

It makes a sane person wonder, what good are policy rate derivatives for forecasting if they can be this wrong, this fast?

Every mortgage advisor worth their credentials has to grasp the answer, or they’re effectively giving clients directions while blindfolded.

Predicting rates is not the point

Friday's unsavoury jobs data—on each side of the border—sent yields tumbling and BoC rate cut probabilities soaring. The conversation quickly shifted from "will they cut" to "how much will they cut?"

In the latest edition of 'bad news is good news,' labour data disappointed on both sides of the border today. That's little reason to celebrate, unless you're well-qualified and need a mortgage.