Video Commentary
October 2026
In this month’s Fixed Income commentary preview, Vice President, Portfolio Manager Etienne Bordeleau examines the reversal in global bond yields, growing concerns over AI-related capital spending, and the diverging outlook for U.S. and Canadian interest rates. He also discusses why markets may be overestimating future Bank of Canada rate hikes and how Ninepoint is positioning its fixed income portfolios amid rising credit risks.
Key Topics Covered
- Bond Yield Reversal – Global interest rates declined in October following September's sharp increase.
- AI Spending Under Pressure – Rising funding costs threaten the pace of AI infrastructure investment and U.S. economic growth.
- Widening AI Credit Spreads – Hyperscaler credit spreads continue to widen, signalling growing financing risks.
- Federal Reserve on Hold – Elevated inflation and economic uncertainty complicate the Fed's policy outlook.
- Bank of Canada Rate Hike – The BoC raised rates for the first time since 2023, despite signs of economic weakness.
- Rate Expectations Too Aggressive? – Markets are pricing nearly 100 basis points of Canadian rate hikes over the next year.
- Canadian Duration Opportunity – The team favours short-term Canadian bonds as rate expectations appear elevated.
- Defensive Credit Positioning – Credit hedges and selective exposure help manage risk while maintaining portfolio yields of 5.6%–6.7%.
