Curve Your Enthusiasm

Ian is joined by Jeremy Saunders this week, and the co-hosts begin the show discussing the manic week that was. There was not a lot of visibility to the moves in bond and equity markets over the prior few sessions, and Jeremy discusses his view on what was real and what was myth. Ian spends some time talking about the lack of evidence to support a few of the theories that markets are thinking about. The duo spend time talking about the level of interest rates going forward, disagreeing on the most likely direction of longer-term interest rates over the coming weeks. Ian provides his view on what the Bank of Canada is likely to do at their meeting next week, while Jeremy gives an update on his Fed views. The show completes with Ian and Jeremy discussing their favourite expressions of macro themes in the bond market.

In the first episode of 2025, Ian is joined by Aaron Carter from the financing desk to discuss recent adjustments in the short-end. The show begins with the duo discussing the importance of the Bank of Canada’s move to change the way monetary policy is implemented, namely moving back into a corridor system. Aaron gives his ‘big picture’ view on why this is a real game-changer for CORRA, and his expectations around the evolution of the spread to the target rate. Ian takes time discussing the various administered rates in the Canadian short-end and how to think about the subset of arbitrage opportunities. Aaron finishes the episode by describing the incoming tri-party repo system and how that will interact with monetary policy going forward.

In a very special edition of Curve Your Enthusiasm, Stephen Poloz joins Ian as co-host for this week’s episode. The show begins by talking about the outcome of the U.S. presidential election, and what potential trade uncertainty means for the Canadian economy and monetary policy. Stephen spends time talking about the structural underperformance of the Canadian economy relative to other OECD countries, and provides some suggestions on how it could be fixed. The duo discuss R*, and why the actual neutral rate is not moving as fast as markets may think. In the balance of the episode, the duo discusses the impact of higher longer-term interest rates on monetary policy, the role of a flexible exchange rate and, how much the BoC can diverge from the Fed. The show finishes with a discussion on Stephen’s new mandate with Canadian pension plans.

Ian is joined by Jeremy Saunders this week, and the duo begin the show discussing the spate of U.S. jobs data last week. Ian discusses the internals of the JOLTS and NFP reports, noting the trend for U.S. labour demand is a negative one. Jeremy opines on his view on the election, and how the best opportunities are to fade recent flattening in the U.S. curve. They take some time to discuss the BoC, noting that recent data provides no confidence the Bank will slow down the cycle anytime soon. Ian outlines his view for a steeper swap-spread curve while Jeremy paints a picture of a flatter one. The pair spend some time talking about the specific tenors of the spread curve, and end the show outlining their favorite trades for the week ahead.

Ian is joined by two guests this week, Paul Beaudry (Professor of Economics at UBC and Former Deputy Governor of the Bank of Canada) and Ali Jaffery from CIBC Economics. The episode begins with Paul giving his view on the 50.0bps cut from FOMC, and what the most recent strong NFP means for the November meeting (hint: 25.0bps not 50.0bps). In contrast, when thinking about the Bank of Canada, Paul outlines his views that the preconditions for getting administered rates to a much lower are setting have been met for Canada, and provides his views for the October meeting (hint: 50.0bps, not 25.0bps). Ian discusses the need for a smaller balance sheet, while Ali gives an update on what higher energy prices mean for the BoC reaction function.

Ian is joined this week by Ali Jaffery in CIBC Economics. The duo begin the episode by taking stock of the intense market volatility seen over the past week, and whether what triggered the moved has a real fundamental basis. Ali discusses the other pockets of strength in the U.S. economy, concluding that the U.S is slowing but not enough to warrant non-standard sized cuts, like 50.0bps. Ian discusses the triggering of the Sahm rule within the context of Okuns Law, and Ali spends time talking about the underlying dynamics of the U.S. labour market. Ian and Ali go back-and-forth on what a faster Fed means for the Bank of Canada, ultimately landing on the view that the Bank can slow down if the Fed is speeding up. Ian finishes the episode discussing his favorite trades, and the implication of what a faster Bank does to 5yr yields, and thus 5yr mortgage rates.

Ian is joined this week by CIBC Capital Markets’ Brenden Donaher, Executive Director from the Short Term Interest Rate Trading (STIRT) desk. The show begins with Ian highlighting the three key takeaways from the Bank of Canada rate decision last week. The Bank sounds more dovish and that raises the risk of an easing cycle which takes policy rates below neutral. Brenden provides his view on current expectations from the BoC rate path, comparing and contrasting the distribution to the United States, United Kingdom and Australia. The duo discuss what has worked and what hasn’t across the cross-currency curve, and why expectations of BA cessation never materialized in stronger short-end cross-currency pricing. Brenden gives his view on recent BoC actions to contain CORRA, and the pair give an overview of their expectations on the central bank meetings this week and how best to trade them.

Ian is joined this week by CIBC’s Senior Economist, Ali Jaffery, and the focal point of the episode is to preview the upcoming Bank of Canada interest rate decision. Ali begins the episode outlining his view on forecast changes, and the likelihood that the Bank shifts from outcome-based guidance to forward-guidance. Ian talks about current market pricing for the BoC relative to the Fed, highlighting why he thinks there is too little priced in mid-2025. The pair do a deep dive on the impact of a 2025 trade war, specifically what it means for global growth and central bank responses. The episode finishes with Ian discussing reasons behind recent CORRA dislocations, and the need for a change in how QT is being managed.

Ian Pollick is joined by Nicholas Neary this week, Managing Director at DV Trading Group. The duo begin the episode by discussing the Bank of Canada interest rate cut, and what the near-term market implications are. Nicholas highlights his view on the threshold for policy divergence, which is considerably larger than most analyst estimates. The pair go on to discuss whether duration markets are safe, and what that means for the likely shape of the term structure. Ian talks about what is needed for the yield curve to sustainably steepen, while also discussing whether interest rate relief is really on the way for key borrowing rates in the economy. Nicholas provides his view on HQLA product, and why the provincial bond curve looks the way it does. The show completes with the pair talking about their favorite trades over the next two months.

Divergence is the most oct-cited narrative when it comes to Canadian macro right now and, for good reason. In this episode, Ian is joined by Andrew Grantham, and the duo begin the episode by dissecting the latest Canadian jobs report. Despite the eye-popping headline number, the reality is that ‘under the hood’ there is ample evidence of a labour market that is slowing. Andrew spends time digging into this, and comparing/contrasting to the U.S. labour market. Ian gives his opinion on ‘where’ this macro divergence is priced into the bond curve, and provides his favourite trades on this theme. They do a situational analysis on the pace of BoC cuts, and conclude that whenever the Bank starts easing, regardless how far they get ahead of the Fed, the upcoming cycle will be irregular and shallower than most think.