monthly report
Bank of Canada (BoC) caution in December; early signs of a policy pivot?
The Bank of Canada’s December policy statement highlighted the stalling economy and decline in three-month core inflation, suggesting a pause in tightening. 2022 performance returns showed high grade credits held up well, with Canadian government bonds outperforming G7 peers, but still suffering negative returns.
Key highlights:
- Growth and inflation expectations – BoC signals possible policy pause, but central bank caution remains in place
- Canadian govts and credit – Canadian spreads tighten on possible BoC pivot
- Global yields and spreads – Most G7 sovereign yields fell in Q4, despite the back-up in December
- Performance – Long gilts, WGBI, Treasuries and inflation-linked bonds suffered deep losses in 2022 (in CAD)
- Sovereign and climate bonds – Climate WGBI outperformed WGBI in Q4, despite losses in December
This report provides actionable insights on currency-adjusted performance, macro drivers, shifts in yields, spreads and curves across conventional, inflation-linked and corporate bonds within the Canadian fixed income market.
Fixed Income Insights (Canada Edition) is part of a series of Market Maps reports, available by email as soon as they are published.
For specialist content on a range of investment topics, including macroeconomic analysis and how it affects market performance and multi-asset analysis, viewed through our indices and data, explore our Global Investment Research hub.
