Fed's Haste Makes Canadian Debt a Better Bet Than Treasuries
- U.S. bond yields will probably rise faster than Canada’s
- Bank of Canada is expected to tighten policy less aggressively
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Canadian government bonds are outperforming their U.S. counterparts by the most in seven months, an advantage that’s unlikely to disappear soon with the northern central bank in less of a rush to raise interest rates.
“There’s way too much optimism priced into the Canadian curve,” said Darcy Briggs, a Calgary-based portfolio manager at Franklin Bissett Investment Management with C$5.4 billion ($4.3 billion) in fixed income. “I don’t expect Canadian rates to move as high or as fast as in the U.S.”