Analysts at NBF Economics and Strategy noted the implications of increased spending approved by Congress last week.
"In the current environment, we do not exclude a further increase of the term premium. Moreover, we see the increased spending approved by Congress last week lifting U.S. growth by roughly half a percentage point annually, from 2.5% to 2.9% in 2018 and from 2.1% to 2.5% in 2019.
We now see rising odds that the 10-year Treasury yield could end the year trading in a range of 3.10% to 3.30%, this would be a full year ahead of our previous forecast. Given our expectations regarding the Canada – U.S. yield spreads, we see 10-year Canadas trading around 2.85% in Q4, 2018."
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