The Saudi's continue to work with OPEC

Posted: Monday, November 12, 2018 - 08:54 EST

The Saudi’s continue to work with OPEC to cut oil producer supply in the region.  The target is to reduce production by one million barrels per day from the October levels.  Further talks are in progress to additionally decrease supply in 2019.  Oil production in Saudi Arabia has again creeped higher to levels seen back in 2015 and 2016, although cooperation will be required to ensure that other oil production countries in the region comply as well to boost oil prices.  Following the news, WTI prices have moved back above $60/barrel.  In the U.K., Brexit negotiations continue, although reports this morning indicate that there is considerable opposition within Prime Minister May’s party.  Members of parliament have suggested another referendum vote as well as displeasure for the current plan.  The U.K. is still expecting a deal to be made this fall, as negotiators are now scrambling to put a final proposal in place by the end of the month.

This week, the economic calendar remains light in Canada although the U.S. will release CPI and retail sales data.  Headline CPI in October is expected to increase to 2.5% annually, while core inflation should remain above 2%.  Retail sales are also expected to strengthen by 0.5%, rebounding from a softer September.  The bond market will be closed today in observation of Remembrance Day over the weekend.  Flows on Friday in the Canadian corporate credit market were also muted due to the early close.  Despite marginally more stability recently, related to risk assets, investors will continue to watch tomorrow’s deadline for Italy, who is expected to deliver a revised fiscal budget to the Eurozone.

Equity Markets:

 

  Index Level % Change QTD YTD Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
S&P 500 2,781.01 -0.92% -4.37% 5.74% 3.09% 4.48% 6.64% -0.76% 3.43% 7.71%
TSX

15,274.44

-0.54%

-4.73%

-3.43%

-1.64% 3.68% 4.44% -4.52% 6.77% -0.56%

Rates:

 

Today

% Change

QTD change

YTD change

Q2 2017

Q3 2017

Q4 2017

Q1 2018

Q2 2018

Q3 2018

Canada 5 Year

2.43%

-0.02% 0.09% 0.57% 1.39% 1.75% 1.87% 1.97% 2.07% 2.34%
Canada 10 Year 2.51% -0.03% 0.08% 0.46% 1.76% 2.10% 2.05% 2.09% 2.17% 2.43%
Canada 30 Year 2.53% -0.03% 0.11% 0.26% 2.15% 2.47% 2.27% 2.23% 2.21% 2.42%
30yr Generic Corporate A rated Spread 1.30% 0.02% 0.00% 0.02% 1.21% 1.24% 1.21% 1.24% 1.28% 1.30%
30yr All-in Corporate A rated Yield

3.83%

-0.01% 0.11% 0.28% 3.36% 3.71% 3.48% 3.47% 3.45% 3.72%
US 10 Year 3.19% 0.01% 0.13% 0.78% 2.31% 2.33% 2.41% 2.74% 2.86% 3.06%
CDX IG 66.640 0.000                

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.