Mortgage rates have thus far evolved in-line with our December 2010 forecast, with the 5-year fixed rate reaching 5.44 per cent and the 1-year rate hitting 3.50 per cent in mid–February. Mortgage spreads (the difference between a fixed mortgage rate and the yield on Government of Canada bonds) have returned to historically normal levels and we expect these spreads to remain fairly stable in subsequent quarters. Therefore, the path of future mortgage rates will be largely determined by changes in government bond yields, which have moved significantly higher in recent months but are currently being pushed lower by world events. We anticipate that, barring a growth depressing and sustained rise in oil prices, yields will move gradually higher throughout the year as markets price in improving economic conditions and higher inflation expectations. Rising yields will in turn lead to higher mortgage rates, likely in the realm of 4.35 per cent for a 1-year and 5.90 per cent for a five-year fixed rate mortgage by the end of the year.