US debt default averted, but there will still be growing pains to get accustomed to new spending cuts Kyle Green – Mortgage Alliance As US Congress announced Tuesday Aug 2nd to increase the debt ceiling to $14.7 trillion, bond yields plummeted to 1.76% for a 5 year bond yield, crashing through the 2% “support” level. [...]

The 5-year bond yield has nose-dived 16 bps today, crashing through “support” at 2.00%. It’s the biggest plunge in yields since March 2009. As of this writing, the 5yr GoC sits at 1.87%—seemingly en route to its 28-month low of 1.835%. Yields are hurtling lower in response to a slew of negatives including: “Austerity measures” (spending cuts) [...]

Canada’s central bank may need to keep interest rates low as the economy faces “substantial headwinds,” Bank of Canada Governor Mark Carney said in an interview published on Friday. “Monetary policy may still need to be stimulative in order to close the output gap and in order to get inflation back to target,” Carney is [...]

TORONTO (Reuters) – Toronto-Dominion Bank  became the first primary dealer to push its forecast for the next Bank of Canada rate hike into 2012, warning the economy has not fully emerged from the shadow of the financial crisis. TD, Canada’s second-biggest lender, said on Tuesday it expects that the Bank of Canada will next raise [...]