BlackRock Abandons Rate Forecast as Oil Stalls: Canada Credit

BlackRock Inc. is abandoning a prediction that bond yields will rise this year as collapsing demand for Canada’s biggest export derails the nation’s economic recovery.

Aubrey Basdeo, head of Canadian fixed-income at the world’s biggest money manager, said the plunge in oil prices caused him to revised internal forecasts at the end of last year. He now anticipates 10-year government bond yields to remain less than 1.75 percent and fall to as low as 1.25 percent, compared with a previous forecast of 2 percent to 2.5 percent. The Bank of Canada, long seen taking the cue to raise interest rates from the Federal Reserve, will instead extend its four-year pause through 2015 because of the impact of oil, Basdeo said.