The Bank of Canada cut the overnight rate by 25bps to 4.75%. Markets responded as shown in charts 1–3 by driving the Canada 5-year yield even lower to 3.42%, further emboldening the rally from 3.8% just a week ago while driving the 2-year yield well under 4% for about a 40bps rally over the past week. Variable and fixed rate mortgage rates are going to be cut on the back of this which should add strength to the ongoing Spring housing market. The Canadian dollar depreciated by a third of a cent to the USD on a combination of the BoC and a very strong US ISM-services report. {charts} First off, hats off to the folks ... (full story)