Canada CAD

Canada 5-Year Bond Auction

Impact:
Low

Latest Release:

Date:
Actual:
2.845%
Forecast:
Previous/Revision:
2.898%
Period:

Next Release:

Date:
Period:
What Does It Measure?
The Canada 5-Year Bond Auction measures the demand for government bonds that mature in five years, reflecting the government's borrowing costs and investor sentiment toward Canadian debt. It primarily assesses yields, bid-to-cover ratios, and investor participation levels, indicating market confidence and expectations regarding future interest rates.
Frequency
The report is released monthly, typically on a set schedule, with preliminary figures indicating initial auction outcomes which may be revised as more data becomes available.
Why Do Traders Care?
Traders closely monitor the 5-Year Bond Auction as it influences yield curves and impacts the valuation of other securities, such as currencies and equities. Higher-than-expected demand often leads to lower yields, favoring bonds and suggesting optimism in the economy, while weaker demand may lead to higher yields, potentially causing bearish sentiments in stocks.
What Is It Derived From?
The auction results are derived from direct bids made by institutional and retail investors, with the total amount of bonds offered and the competitive yields at which they are purchased taken into consideration. The auction uses a sealed-bid method, where participants submit offers for the quantity and yield they are willing to accept, allowing for a transparent assessment of market demand.
Description
The Canada 5-Year Bond Auction provides vital insight into market conditions, investor confidence, and the government’s financing costs. It can serve as a leading indicator for future interest rate moves, reflecting broader economic sentiment and prevailing expectations regarding monetary policy in Canada.
Additional Notes
This auction serves as a primary tool for assessing market liquidity and investor sentiment towards Canadian government debt, acting as a coincident economic measure. Its results can offer comparative insights against other bond auctions, not only within Canada but also with international bond markets, revealing shifts in risk appetite and capital flows.
Bullish or Bearish for Currency and Stocks
Higher than expected: Bullish for CAD, Bearish for Stocks. Lower than expected: Bearish for CAD, Bullish for Stocks. Hawkish tone: Signaling higher interest rates or inflation concerns is usually good for the CAD but bad for Stocks due to higher borrowing costs.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number Better than forecast for the currency (or previous revise better)
Red Number Worse than forecast for the currency (or previous revise better)
Hawkish Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish Favors lower rates to boost growth, weakening the currency but lifting stocks.
Date Time Actual Forecast Previous Surprise
2.845%
2.898%
2.898%
2.848%
2.848%
2.768%
2.768%
2.849%
2.849%
3.228%
3.228%
3.146%
3.146%
3.312%
3.312%
2.824%
2.824%
2.74%
2.74%
3.036%
3.036%
3.535%
3.535%
3.41%
3.41%
3.662%
3.662%
3.613%
3.613%
3.607%
3.607%
3.637%
3.637%
3.524%
3.524%
3.261%
3.261%
3.786%
3.786%
4.122%
4.122%
4.012%
4.012%
3.723%
3.385%
3.251%
3.251%
2.901%
2.901%
3.14%
3.14%
3.621%
3.621%
3.636%
3.636%
3.313%
3.313%
3.132%
3.132%
3.231%
3.231%
2.893%
2.893%
1.791%
1.791%
1.567%
1.567%
1.524%