Canada CAD

Canada 2-Year Bond Auction

Impact:
Low

Latest Release:

Actual:
2.521%
Forecast:
Previous/Revision:
2.532%
Period: Apr 2025

Next Release:

Forecast:
Period: May 2025
What Does It Measure?
The Canada 2-Year Bond Auction is a national event that measures the yield and demand for the government-issued 2-year securities. It reflects investors' expectations regarding interest rates and inflation over a short to medium-term period, with a lower yield indicating high demand and a higher yield indicating low demand.
Frequency
The auction is held regularly, often on a quarterly basis, with results typically released on the auction day.
Why Do Traders Care?
Traders pay close attention to the 2-year bond auction as it provides insights into investor sentiment regarding short-term interest rates and government fiscal stability. A higher-than-expected yield may be bearish for the Canadian dollar as it suggests diminished demand, while lower yields can be bullish, indicating strong interest from investors.
What Is It Derived From?
The event is derived from the competitive bidding process where institutional investors, such as banks and investment funds, purchase Canadian government bonds. The yield is determined by the highest price bidders are willing to pay, reflecting their expectations of future economic conditions.
Description
During the bond auction, the Canadian government sells its 2-year bonds to investors via a bidding process. Preliminary data may initially suggest broad trends but can be revised as final figures provide more precise details of pricing and demand. Although financial markets often react to preliminary data for timely insights, final auction results can lead to market adjustments. The auction outcomes are essential for gauging sentiment, as they reflect predictions based on anticipated economic circumstances within a 2-year frame.
Additional Notes
The 2-year bond auction acts as a leading economic indicator, helping to anticipate future interest rate movements and economic health. It is often compared with similar bond auctions in other countries, like the U.S., to identify global trends and economic disparities.
Bullish or Bearish for Currency and Stocks
Higher than expected: Bearish for CAD, Bullish for Stocks. Lower than expected: Bullish for CAD, Bearish for Stocks. Hawkish tone: Signaling higher interest rates, is usually good for the CAD but bad for Stocks due to higher borrowing costs.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the ‘Actual’ value differs enough from the forecast or if the ‘Previous’ value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the ‘Actual’ deviates from the forecast or there’s a notable revision to the ‘Previous’ value.

Medium Potential Impact
This event is unlikely to affect market pricing unless there’s an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
'Actual' deviated from 'Forecast' on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
'Actual' deviated from 'Forecast' on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency.

Green Number Better than forecast for the currency (or previous revise better)
Red Number Worse than forecast for the currency (or previous revise better)
Hawkish Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish Favors lower rates to boost growth, weakening the currency but lifting stocks.
Date Time Actual Forecast Previous Surprise
2.521%
2.532%
2.532%
2.563%
2.563%
2.53%
2.53%
2.816%
2.816%
2.589%
2.589%
2.947%
2.947%
3.029%
3.029%
3.128%
3.128%
3.075%
3.075%
3.134%
3.134%
2.872%
2.872%
3.148%
3.148%
3.305%
3.305%
3.689%
3.689%
3.912%
3.912%
4.191%
4.191%
4.196%
4.196%
4.244%
4.244%
4.172%
4.172%
4.076%
4.076%
4.077%
4.077%
3.884%
3.884%
4.25%
4.25%
4.425%
4.425%
4.601%
4.601%
4.829%
4.829%
4.629%
4.629%
4.734%
4.734%
4.662%
4.662%
4.522%
4.522%
4.42%
4.136%
3.665%
3.665%
3.701%
3.701%
3.57%
3.57%
4.166%
4.166%
3.876%
3.876%
3.747%
3.747%
3.684%
3.684%
3.974%
3.974%
3.901%
3.901%
4.089%
4.089%
3.814%
3.814%
3.579%
3.579%
3.174%
3.174%
3.312%
3.312%
3.139%
3.139%
3.034%
3.034%
2.754%
2.754%
2.687%
2.687%
2.455%
1.587%
1.572%
1.572%
1.293%
1.293%
1.185%
1.185%
0.988%