Late yesterday, both Canada and the U.S. announced...

Posted: Tuesday, September 11, 2018 - 09:11 EDT

Late yesterday, both Canada and the U.S. announced that Canadian Minister Freeland would head to the U.S. to meet with Lighthizer in Washington today.  This followed two weeks of intense negotiations between the two countries.  There is some optimism that progress will be made following the surprise announcement for Freeland to leave a summit in Toronto and Lighthizer to depart from the EU trade commission.  However, contentious issues still remain that include dairy, the Chapter 19 dispute mechanism and cultural exemptions for Canada.  The meetings are expected to end by Wednesday, as Freeland is expected back in Canada.

The Canadian corporate credit market was not immune to headlines related to trade yesterday.  Although flows were more muted, a negative bias remained in the market   This morning, BCE is looking to tap the U.S. market for their second deal.  BCE is issuing approximately $300-$400mil 30-year bonds that swap back to Canada at the initial price talk of approximately +205bps over the curve.  In the domestic Canadian market, Aroundtown has also launched a $200mil 7-year bond at +240bps over curve.  The Canadian fixed income market will remain focused on issuance this week with spreads ending yesterday mostly unchanged.

Equity Markets:

 

  Index Level % Change QTD YTD Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
S&P 500 2,877.13 0.19% 6.25% 9.07% 6.07% 3.09% 4.48% 6.64% -0.76% 3.43%
TSX

16,057.09

-0.21%

-0.90%

1.03%

2.41% -1.64% 3.68% 4.44% -4.52% 6.77%

Rates:

 

Today

% Change

QTD change

YTD change

Q1 2017

Q2 2017

Q3 2017

Q4 2017

Q1 2018

Q2 2018

Canada 5 Year

2.23%

0.01% 0.16% 0.36% 1.12% 1.39% 1.75% 1.87% 1.97% 2.07%
Canada 10 Year 2.31% 0.02% 0.14% 0.26% 1.63% 1.76% 2.10% 2.05% 2.09% 2.17%
Canada 30 Year 2.32% 0.02% 0.12% 0.05% 2.30% 2.15% 2.47% 2.27% 2.23% 2.21%
30yr Generic Corporate A rated Spread 1.28% 0.00% 0.04% 0.04% 1.33% 1.21% 1.24% 1.21% 1.24% 1.24%
30yr All-in Corporate A rated Yield

3.60%

0.02% 0.16% 0.09% 3.63% 3.36% 3.71% 3.48% 3.47% 3.45%
US 10 Year 2.95% 0.02% 0.09% 0.55% 2.39% 2.31% 2.33% 2.41% 2.74% 2.86%
CDX IG 58.082 0.215                

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.