U.S. CPI for February increased by 0.2% for the month...

Posted: Tuesday, March 13, 2018 - 09:05 EDT

U.S. CPI for February increased by 0.2% for the month, which matched expectations. This is a slight decline from last month’s increase of 0.5%, with year-over-year headline inflation tracking at 2.2% in February.  Inflation continues to creep steadily higher with increases broadly across all sectors.  Auto prices have been restrained as new car sales have slowed to start the year, while energy prices increased by 0.1% and food costs were unchanged.  Core inflation was similar to last month at 1.8%.  In the U.K., Chancellor Hammond presented the spring statement that indicated the government is making progress to improve the economy.  The forecast notes stronger wages and slower inflation going forward, while GDP was revised higher in 2018 from 1.4% to 1.5%.

The tone was positive in Canadian corporate credit yesterday to start the March break week.  Although flows were skewed towards net buying, overall volumes were lighter than usual.  New issuance is expected to be light this week that should keep spreads in line.  There was some buying in deposit notes that led to spreads to being mostly unchanged.

Equity Markets:

 

  Index Level % Change QTD YTD Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017
S&P 500 2,783.02 -0.13% 4.50% 4.50% 3.85% 3.82% 6.07% 3.09% 4.48% 6.64%
TSX

15,604.79

0.17% -3.27%

-3.27%

5.45% 4.53% 2.41% -1.64% 3.68% 4.44%

Rates:

 

Today

% Change

QTD change

YTD change

Sept 30 2016

Dec 31 2016

Mar 31 2016

June 30 2017

Sept 30  2017

Dec 31  2017

Canada 5 Year

2.056%

-0.03% 0.19% 0.19% 0.615% 1.150% 1.119% 1.393% 1.753% 1.866%
Canada 10 Year 2.222% -0.05% 0.18% 0.18% 0.990% 1.750% 1.625% 1.762% 2.099% 2.045%
Canada 30 Year 2.400% -0.04% 0.13% 0.13% 1.658% 2.350% 2.302% 2.148% 2.472% 2.266%
30yr Generic Corporate A rated Spread 1.210% 0.00% 0.00% 0.00% 1.530% 1.390% 1.330% 1.210% 1.240% 1.210%
30yr All-in Corporate A rated Yield

3.610%

-0.04% 0.13% 0.13% 3.188% 3.740% 3.632% 3.358% 3.712% 3.476%
US 10 Year 2.866% 0.00% 0.46% 0.46% 1.60% 2.50% 2.39% 2.31% 2.33% 2.41%
CDX IG 53.085 -0.662               7

The information contained herein is intended for advisors for general information only and is compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made as to its accuracy. All opinions contained in the commentary and expressed by the portfolio manager are subject to change without notice and are provided in good faith without legal responsibility. All market data is sourced from Bloomberg.