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Important: The revelations that follow stand out as some of the more significant we've published at MLN. As far as we know, this strategy hasn't appeared in other outlets. Mortgage advisors may find it beneficial to convey the findings to clients and referral partners.
For the first time in more than two years, Canada's 2-year yield is trading above the overnight target rate.
This is a big deal for two reasons:
- Two-year yields tend to sniff out Bank of Canada policy moves long before they happen.
- Certain 2-year rate patterns have historically signalled changes to Canada's benchmark prime rate.
This month could trigger just such a pattern.
Here's what history tells us about what happens next...
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