U.S. Thanksgiving holiday is expected to keep headlines subdued

Posted: Thursday, November 22, 2018 - 09:04 EST

U.S. Thanksgiving holiday is expected to keep headlines subdued as a result of U.S. markets being closed.  However, Brexit still remains in the background with Prime Minister May issuing a statement this morning that further developments have been reached between the U.K. and European Commission.  May is expected to update parliament later today and feels confident that a deal can be agreed upon by Sunday.  This draft Brexit deal includes a trade component as well as cross border financial services that will begin immediately to reduce disruptions.  The bill should give some confidence to businesses and allow industry to support the Brexit draft.  The British pound has strengthened this morning as a finalized version of Brexit comes to fruition.  Italy also is in the background after an inflation-linked note issued yesterday received the second lowest order books on record.  This has caused additional worries, as the highly indebted country will require refinancing options for maturing debt over the next couple of years.  In addition, 10-year Italian government yields remain at the highest levels since 2014.

The Canadian corporate credit market remained muted yesterday and should continue to be calm as a result of the U.S. holiday.  Despite better stability compared with the past week, flows remained skewed towards client selling although volumes remained light.  The positive tone did not lead to additional new issuance yesterday.  To end the day, spreads ended mostly unchanged.

Equity Markets:

 

  Index Level % Change QTD YTD Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
S&P 500 2,649.93 0.30% -8.79% 0.84% 3.09% 4.48% 6.64% -0.76% 3.43% 7.71%
TSX

15,095.02

1.47%

-5.74%

-4.46%

-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

2.30%

0.02% -0.04% 0.43% 1.39% 1.75% 1.87% 1.97% 2.07% 2.34%
Canada 10 Year 2.36% 0.01% -0.07% 0.32% 1.76% 2.10% 2.05% 2.09% 2.17% 2.43%
Canada 30 Year 2.42% 0.01% 0.00% 0.15% 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

3.72%

0.03% 0.00% 0.17% 3.36% 3.71% 3.48% 3.47% 3.45% 3.72%
US 10 Year 3.06% 0.00% 0.00% 0.65% 2.31% 2.33% 2.41% 2.74% 2.86% 3.06%
CDX IG 78.200 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.