Canada 2-Year Bond Auction

Info

History

Chart

Impact:

Low

Latest Release:

Date:

Actual:

0.988%

Forecast:

Previous/Revision:

1.103%

Period:

What Does It Measure?

The Canada 2-Year Bond Auction measures the government’s ability to sell short-term debt securities to investors, reflecting demand and confidence in Canada’s economic stability. It primarily assesses the level of interest rates, treasury yields, and investor sentiment in the context of monetary policy.

Frequency

This auction is held regularly, specifically on a monthly basis, with auction results usually released the same day, providing both preliminary and finalized figures on the amounts sold and the interest rates achieved.

Why Do Traders Care?

Traders pay close attention to the 2-Year Bond Auction as it can significantly influence yields on other government securities and inform expectations about future interest rate movements set by the Bank of Canada. Higher demand at the auction, often indicated by lower yields, is generally bullish for the Canadian dollar and can positively affect equity markets.

What Is It Derived From?

The auction results are derived from competitive bids submitted by investors, which can include institutional investors, banks, and retail investors, and are analyzed based on the total amount offered and accepted. The yield produced is calculated from the bid-to-cover ratio, which indicates the level of demand relative to the amount available for sale.

Description

The auction serves as a real-time indicator of investor confidence and liquidity in the Canadian bond market. Preliminary results are crucial for gauging immediate market reactions, while final figures offer a more accurate picture regularly assessed in financial analyses and strategic decision-making.

Additional Notes

The Canada 2-Year Bond Auction is a leading economic indicator, often anticipating broader trends in interest rates and inflation expectations. It is commonly compared to similar auctions from longer-term bonds as a means of assessing the overall yield curve, thereby providing insights into market trends both domestically and globally.

Bullish or Bearish for Currency and Stocks

Higher than expected demand indicating lower yields: Bullish for CAD, Bullish for Stocks.

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	Actual	Previous
Dec 13, 2021	0.988%	1.103%
Nov 17, 2021	1.103%	0.872%
Oct 20, 2021	0.872%	0.598%
Oct 06, 2021	0.598%	0.474%
Sep 15, 2021	0.474%	0.518%
Aug 19, 2021	0.518%	0.547%
Aug 05, 2021	0.547%	0.509%
Jul 15, 2021	0.509%	0.482%