Following a week where global stocks gained as much as $1.3-trillion, for Canadians with limited exposure to that U.S. market the reaction might not have been felt the same way.
Two particular markets come into focus that haven’t shared the short-term positive upside reaction to the new president-elect, and those have been the global bond market and the Canadian dollar.
For only the second time in 20 years, the global bond market has seen more than $1-trillion of value lost in the last four days.
That, as we’ve seen upward pressure on interest rates as a result of expected inflationary pressures from a Trump Administration’s policies, in addition to a Fed more than likely to hike in September.
The Loonie is being pressured lower by the same influences of a U.S. rate hike and the prospects of a challenged domestic economy.
Under these devices it has dropped below the level of 74 cents, and analyst calls – barring a rally in oil prices – are for this trend to continue.