Quebec voters gave a majority mandate to the Liberal Party, led by neurosurgeon Philippe Couillard, after an election campaign focused on fears the separatist Parti Quebecois would seek another vote on splitting from Canada.
Canada’s government bond returns are lagging behind the rest of the world this month for the first time since July as investors bet the nation’s central bank may increase interest rates sooner than analysts expected.
Credit markets indicate investors are becoming certain the Bank of Canada will raise interest rates at a second consecutive meeting after the country posted the largest quarterly gain in employment on record.
Canada’s dollar gained for a second consecutive month, reaching parity with its U.S. counterpart for the first time since April, on speculation an easing of monetary policy by the Federal Reserve will spur global growth.
Canada Housing Trust, the financing arm of the nation’s housing agency , had to offer a higher premium to sell mortgage bonds as investors were concerned about contagion from the European fiscal crisis.
The Bank of Canada will probably keep its key interest rate unchanged today and may emphasize the risks to Canada of a strong dollar and uneven global growth rather than give hints on the timing of the next tightening.