Bank of Canada Moves to Cap Long-Term Rates as Ottawa Pumps up Borrowing: Analysts

Chinese Officials Sanctioned by US for Xinjiang Abuses Have History of Human Rights Crimes

Persecuting Uyghur Muslims in China’s far-western region of Xinjiang is but one of a slew of human rights abuses by the four Chinese officials who were recently sanctioned by the U.S. administration. The sanctions, imposed under the Global Magnitsky Act on July 9, barred four Chinese officials, as well as their immediate family, from entering the United States. The sanctions will also block U.S. properties that are under the individuals’ names and prohibit U.S. transactions with them, the U.S. treasury department said. In Xinjiang, home to roughly 11 million Uyghurs, at least 1 million Uyghurs and other ethnic Muslim minorities have been detained within internment camps and subject to torture and political indoctrination in an effort to coerce them into giving up their faith. But such persecution is not confined…

TORONTO鈥擳he Bank of Canada is moving to help keep down long-term bond yields as Ottawa cranks up issuance to pay for COVID-19-related spending, analysts say, with the central bank raising the amount of 30-year bonds it buys in its quantitative easing program.

Long-term bond yields are currently at historically low levels at about 1.10 percent. But that could change as economic recovery gathers momentum and after Ottawa on Wednesday forecast its largest budget shortfall since the Second World War, saying it would “significantly” raise long-term debt issuance.

The Bank of Canada on Monday purchased $600 million of 30-year bonds in a reverse auction. The maximum amount had previously been $400 million, according to strategists.

Increased purchases could go some way to keeping yields down, said Ian Pollick, global head, FICC strategy at CIBC Capital Markets.

The Bank of Canada “recognizes the risk of incoming supply, and is responding in-kind,” Pollick said.

The 30-year yield jumped by more than 0.10 percent鈥攊ts largest increase since mid-March鈥攍ast week when the government released its new deficit forecast.

The Bank of Canada appears “to be changing the composition” of its balance sheet to more closely match Ottawa’s preference for longer-term borrowing, said Andrew Kelvin, chief Canada strategist at TD Securities.

Investors will on Wednesday eye the Bank of Canada’s interest rate announcement as well as the central bank’s Monetary Policy Report, the first since Tiff Macklem took the reins as governor, for changes to the bond-buying program.

“The BoC could very well buy more bonds in response to higher issuance and could at a minimum jawbone this option in Governor Macklem’s press conference,” said Derek Holt, vice President of capital markets economics at Scotiabank in a note.

“Signalling a willingness to buy more before potential further sell-offs allows governments to focus their efforts more upon the umpteen other pressures upon their finances,” Holt said.

By Fergal Smith

Focus News: Bank of Canada Moves to Cap Long-Term Rates as Ottawa Pumps up Borrowing: Analysts

Chinese Regime ‘Lashing Out’ at the World: China Analyst Gordon Chang

“What we’re seeing right now is a China which is lashing out at everybody,” said China analyst Gordon Chang. In addition to its encroachments on Hong Kong and the first fatal border clash with India in 45 years, “you’ve got the boat bumping and other incidents in the South China Sea, East China Sea; the increased tempo of dangerous intercepts of the U.S. Navy in the global commons; the repeated threats to invade Taiwan; all of these hostile words, these disinformation campaigns directed against the United States and others,” Chang said. The Chinese communist regime has become increasingly belligerent globally, and it “believes it can do what it wants,” Chang said, in an interview with The Epoch Times for the “American Thought Leaders” program. “We have to teach China for…