Post by
CrazyTrader on Jun 02, 2024 9:02am
Watching the A's and T's price Action is the EASIEST way to
understand the relationship of Yields, Reset Yields, and Interest Rates, and what the market thinks.
T's just reset (begining of year) The A's are next (end of year). The A's and T's are basically the same except for when they reset.
It's this Current and Close nature between the T's and A's that gives us the opportunity to see if the Market is "correct" or "wrong".
Past 6 months the market has been "correcting" itself and the price diffence between closing.
As with everyone, the market assumed rates would drop...... but it has remained higher for longer. The BoC still hasn't dropped rates. As such, the A's share price has been gaining on the T's.
If the A's reset with 3.63% for it's 5yr rate, the A's share price should be virtually the same as the T's.
If more, then share price will be higher than the T's.
If less, then share price will be lower than the T's.
Baring all other factors and looking only at yields/reset yields.
And NO, I don't own any A's. Pierre, I'm not you. I'm not promoting the A's just because you think I own them. I don't know if the A's share price will go up more, maybe the T's will drop instead.
But based on current yields and reset yields, I'm guessing all share prices are going up still. So I guess I would put more money on guess that the A's will gain quicker than the T's. They have been over the past 6 months.
Now hopefully you understand maybe WHY. and not say, "who cares".