Rates shot higher last week by around 40bp as the EU, IMF, and ECB were able to come to an agreement to prevent a default of Greek sovereign debt, and those measures were passed by the Greek parliament. As markets had become concerned in recent weeks about a potential default and the knock-on effects of such an event (remember Lehman), money had poured into bond markets, driving rates lower. As those fears were addressed by last week’s aid package, some of those flows naturally reversed, driving rates sharply higher.
For a bit of local flavor, on Wednesday, Canadian Inflation numbers for May were reported and surprised the market as they were slightly higher than expected. While year-over-year core inflation of 1.8% remains below the Bank of Canada 2.0% target, the market had been expecting a 1.5% reading. Higher inflation readings lead to higher interest rates in the bond market.
Tags: Greece, Canadian Inflation, Apartment, Financing, Lending, Commercial, Mortgages, Canada, Vancouver, Calgary, Toronto, Montreal, Halifax