WEBVTT

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<v 0>In the fixed income markets,</v>

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no security is watched more closely or analyzed more intensely than the

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10-year U.S. Treasury note.

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Tens of billions of 10-year notes trade on average every business day.

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Trillions of dollars of corporate and mortgage-backed securities are priced

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based on the yield of the 10-year.

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When 10-year yields rise over an extended period,

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it signals continuing economic booms and bullish investor sentiment.

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Falling 10-year yields over an extended period portend looming economic

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busts, financial or political crises,

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and investor flight to quality trades.

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Investors and traders from Tokyo to Toronto to Toledo

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gain and lose small fortunes betting on every trade tick of the U.S. 10-year.

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Today, the yield on the U.S. 10-year is 3.23%.

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12 months ago, the yield was 2.35%,

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and in July 2016,

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it recorded its all-time low yield of 1.35%.

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When the yield broke above 3% earlier this year,

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it was headline news.
Now that the yield has settled in

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above 3% few people are batting an eye.

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The Fed is eight quarter-point increases into a tightening cycle.

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The economy expanded 4.2% at last reading,

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and there is enough fiscal and monetary stimulus in the economy to drive growth

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for the foreseeable future.

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Looking over the period beginning in 1990,

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the average yield on the U.S. 10-year is 4.6%.

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We expect 3% to be the new bottom as rates move from emergency

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levels to more normalized levels.

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For more information on interest rates and financial markets,

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check out the latest edition of the Canso Market

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Observer at cansofunds.com. We look forward to your comments.

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Thank you very much.