Yesterday, U.S. 10 year treasury yields reached a seven year high

Posted: Wednesday, May 16, 2018 - 09:39 EDT

Markets this morning are largely overlooking the potential cancellation of U.S-North Korea summit, seeing the rhetoric largely as a negotiation tactic. Yesterday, U.S. 10 year treasury yields reached a seven-year high, peaking at 3.09%, and remain at 3.065%.
  
Yesterday, Honda Canada Finance came to market with a 7 year domestic unsecured debt issuance. The $500 million deal came at +102bps over the curve, and was well received with 60 buyers and 10% fills.  Hydro One reported, with earnings largely in-line with expectations. The pending Avista acquisition is expected to close in 2H18. The management indicated in the earnings call that they are scheduled to meet with rating agencies in May to discuss potential rating actions.  Recall, both S&P and Moody’s revised the outlook from stable to negative on the back of the Avista acquisition announcement.

Equity Markets:

 

  Index Level % Change QTD YTD Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
S&P 500 2,711.45 -0.68% 2.90% 2.12% 3.82% 6.07% 3.09% 4.48% 6.64% -0.76%
TSX

16,097.81

0.08%

5.11%

0.36%

4.53% 2.41% -1.64% 3.68% 4.44% -4.52%

Rates:

 

Today

% Change

QTD change

YTD change

Q4 2016

Q1 2016

Q2 2017

Q3 2017

Q4 2017

Q1 2018

Canada 5 Year

2.305%

0.05% 0.34% 0.44% 1.150% 1.119% 1.393% 1.753% 1.866% 1.969%
Canada 10 Year 2.475% 0.05% 0.38% 0.43% 1.750% 1.625% 1.762% 2.099% 2.045% 2.091%
Canada 30 Year 2.508% 0.05% 0.28% 0.24% 2.350% 2.302% 2.148% 2.472% 2.266% 2.228%
30yr Generic Corporate A rated Spread 1.240% 0.00% 0.00% 0.03% 1.390% 1.330% 1.210% 1.240% 1.210% 1.240%
30yr All-in Corporate A rated Yield

3.748%

0.05% 0.28% 0.27% 3.740% 3.632% 3.358% 3.712% 3.476% 3.468%
US 10 Year 3.065% -0.01% 0.33% 0.66% 2.50% 2.39% 2.31% 2.33% 2.41% 2.74%
CDX IG 61.763 0.488                

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.