October 9, 2026
Video Commentary
October 2026
In this month’s Fixed Income preview, Etienne Bordeleau discusses September’s volatile global fixed income markets, fiscal pressures across G7 nations, and selective positioning opportunities in Canadian rates and credit. He highlights the divergence between Canada and Germany’s stronger fiscal positions versus elevated deficits elsewhere, Canada’s energy export advantage, and the compressed housing market supporting core inflation targets.
Key Topics Covered
- September was volatile across global fixed income with interest rates rising across yield curves.
Fiscal issues, AI build-out, and war in Iran are pushing central banks to raise rates. - Canada and Germany have better fiscal positions than other G7 countries.
- Canada exports energy, lessening inflation impact compared to importers like Germany.
- Housing market remains weak; shelter inflation is only 1.5%, supporting BoC’s core inflation target.
- 100 basis points of rate hikes priced into Canadian curve is too much given current economy.
- Front end of Canadian curve is most impacted by monetary policy and offers an entry point.
- Long-end (10-30 year) bond exposure should be avoided due to global fiscal contagion risk.
- September saw heavy credit issuance; hyperscaler funding needs should be avoided.
- ABS in Canada remains cheap, particularly sub tranches offering high-five to low-six yields.