Canada Swap Spreads

August 13, 2025   |   
Author: Kevin Dribnenki

Cover of Canada Swap Spread article

After a 43-basis-point tightening over 13 months, Canadian 5-year swap spreads are showing signs of stabilizing, opening up new opportunities in fixed-income markets. This tightening reflects changes in risk appetite, government bond issuance, and mortgage market hedging practices. While economic uncertainties persist, current spread levels suggest a potential for mean reversion, particularly when compared to historical trends. This market development provides tactical entry points for relative value strategies.

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