Canada 3-Year Bond Auction

Info

History

Chart

Impact:

Low

Latest Release:

Actual:

1.304%

Forecast:

Previous/Revision:

1.043%

Period: Nov 2021

What Does It Measure?

The Canada 3-Year Bond Auction measures the demand for government securities in Canada, specifically focusing on the issuance and pricing of bonds with a three-year maturity. It assesses investor confidence in the government's ability to meet its obligations, affecting indicators such as interest rates and public borrowing costs.

Frequency

The auction is conducted regularly, typically on a monthly basis, with results released on the same day as the auction takes place.

Why Do Traders Care?

Traders closely monitor the results of the 3-Year Bond Auction as it can indicate the level of investor demand for Canadian government debt, which in turn influences bond yields and interest rates. A strong auction can signify confidence in the economy and lead to bullish sentiment for the Canadian dollar and equities, while weak results may have a bearish impact on these markets.

What Is It Derived From?

The results of the Canada 3-Year Bond Auction are derived from bids submitted by institutional investors, which are evaluated based on the total amount offered and the yields investors are willing to accept. The auction typically employs a uniform price format where all successful bidders pay the same yield determined by the auction process.

Description

The Canada 3-Year Bond Auction provides insights into the government’s borrowing costs and investor sentiment regarding economic stability. It serves as a barometer of confidence in Canadian fiscal policy and overall economic health, reflecting market conditions that can impact broader financial markets.

Additional Notes

The auction serves as a leading indicator of market sentiment related to future interest rates, as the yield determined at the auction may influence borrowing costs and monetary policy decisions. It is often compared to other sovereign bond auctions and reflects similar trends in global bond markets, informing investors about demand for Canadian assets relative to international benchmarks.

Bullish or Bearish for Currency and Stocks

Higher than expected demand: 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
Nov 22, 2021	1.304%	1.043%
Oct 25, 2021	1.043%	0.668%
Aug 25, 2021	0.668%	0.759%