Transcription of MARKET CALL - CIBCWM.com
1 CIBC Capital Markets Economic Insights - april 6, 2016. MARKET call . After Janet Yellen's dovish comments last week, an april Fed rate hike has been ruled out. But markets are now too complacent about the outlook for fed funds thereafter. The economy should be able to handle a couple of hikes later in the year, with June still being our base case for the first move of 2016. In Canada, the year began with fireworks, but don't expect us to make much progress on closing the output gap this year. Look for growth to settle at roughly for the full year, with strength not showing up until later in the year and into 2017, when the effects of fiscal stimulus and the weak Canadian dollar work their way through the economy. The loonie's rebound has been tied to both oil prices and a more dovish sounding Fed.
2 However, with a meaningful oil price rally only coming later in the year and the MARKET underpriced for Fed rate hikes, the C$ should lose ground as we head into the middle of the year. INTEREST & FOREIGN EXCHANGE RATES. INTEREST AND FOREIGN EXCHANGE RATES. 2016 2017. END OF PERIOD: 5-Apr Jun Sep Dec Mar Jun Sep Dec CDA Overnight target rate 98-Day Treasury Bills 2-Year Gov't Bond 10-Year Gov't Bond 30-Year Gov't Bond Federal Funds Rate 91-Day Treasury Bills 2-Year Gov't Note 10-Year Gov't Note 30-Year Gov't Bond Canada - US T-Bill Spread Canada - US 10-Year Bond Spread Canada Yield Curve (30-Year 2-Year) US Yield Curve (30-Year 2-Year) EXCHANGE RATES CADUSD USDCAD USDJPY 111 116 118 120 118 116 122 123. EURUSD GBPUSD AUDUSD USDCHF USDBRL USDMXN 2.
