Daily Commentary

MarketMinder’s View: In the wake of slight volatility in long-term Treasury yields to levels totally precedented in the last three years, articles galore seek meaning in the wiggles and blame everything from foreign holders selling US debt to hedge funds and so on. It all seems pointless to us, considering the wiggles aren’t big if you put them in any kind of context. Relatedly, people also often overrate foreign holders’ share of the US Treasury market. This gives you some data, running through major foreign holders of US debt and summing them up. In total, foreign governments hold 24% of US debt as of February. That doesn’t far exceed the 20% held by the US federal government itself! (Data from the US Treasury.) Furthermore, if one nation elects to sell bonds, remember there is a buyer on the other side. Hence, China has been cutting back its US bond holdings in recent years—to little identifiable effect on US interest rates. We are skeptical there would be a rush to the exits now and nothing in markets to date contradicts that view. Heck, as we wrote recently, the US held long-term bond auctions twice since “Liberation Day.” Indirect bidders’ demand—often a proxy for overseas bond buyers—rose.

MarketMinder’s View: With Canada’s April 28 federal election now less than a week out, polling is shedding light on a marked shift in recent months. Now, before we go further, please note MarketMinder favors no politician nor any political party, assessing developments solely for their potential market and/or economic effects. As detailed in this piece, at the start of 2025, the Conservative Party—led by Pierre Poilievre—had a 20-percentage point (ppt) lead over the Liberals under former Prime Minister Justin Trudeau. But then US President Donald Trump’s inauguration, tariff policies and hyperbolic talk of making Canada the 51^st state upended everything. Trudeau was forced to resign after seeming unprepared to deal with tariff threats, with the anglosphere’s favorite technocrat, former UK and Canadian central banker Mark Carney stepping in as PM. This article documents the shift in attitudes among Canadian voters, perhaps tied to seeming similarities between Poilievre and (the very unpopular in Canada) Trump, giving Carney and the Liberals a five ppt lead now. Now, polling has proven off in several elections globally in recent years, and it isn’t impossible the current polls downplay shy Conservative support. We shall see next week. Either way, political uncertainty in Canada should fall after the election, leaving us to weigh potential budget and tariff negotiation effects. Stay tuned for all that.

MarketMinder’s View: This article mentions several individual companies and delves into politics a bit, so please keep in mind that MarketMinder doesn’t make individual security recommendations, doesn’t favor any politician or political party and certainly doesn’t recommend any politician. (Perish the thought.) This does highlight another avenue of potential tariff mitigation: Lobbying. Trump’s tariffs have already unleashed a flurry of negotiations among countries, which this article touches on, but it also has business leaders seeking exemptions—and a few have been granted. Maybe they prove temporary, maybe not. But this highlights a path to tariff effect mitigation few seem to weigh. And it also highlights another practical problem with tariffs: While President Donald Trump has often spoken of “draining the swamp” from people seeking political favors, these tariffs are likely to unleash a massive flood of lobbyists. Furthermore, they boil directly down to the government picking winners and losers—far from ideal. So, just our view, but this highlights a path to mitigation, but it also highlights problems with the policy economically.