BMO Views from the North Welcome to 2025
Jan 9, 2025
In this discussion, Andrew Wallace, a key member of BMO’s Government of Canada bond trading team, dives into the economic landscape of 2025. He shares insights on the current bond market dynamics and explores how central bank policies and political developments might shape fiscal strategies. Andrew also highlights trends in the mortgage market and consumer spending behavior during the holiday season. With a focus on trading strategies for Canadian bonds, he provides a detailed look at how market conditions could evolve in the coming year.
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Bond Rally Outlook
- Ben Reitzes believes a bond market rally is due after the sell-off, but real rates may need to rise further.
- He thinks Canada might underperform the US in a rally.
Bank of Canada Policy
- Reitzes suggests the Bank of Canada needs to match the Fed's policy moves to avoid currency issues.
- He notes that further currency depreciation could exacerbate inflation.
GST Holiday Impact
- Andrew Wallace notes anecdotal evidence suggests the GST holiday is impacting spending.
- He recounts friends and family stocking up on goods, observing bare shelves in stores.