Brexit remained in the headlines over the weekend...

Posted: Monday, April 8, 2019 - 10:01 EDT

Brexit remained in the headlines over the weekend in anticipation of this week’s meeting between UK Prime Minister May, French President Macron, and German Chancellor Merkel.  The UK continues to request an extension to June 30th although the EU has been pushing for a longer timeframe.  Prime Minister May will also work with the opposition Labour party leader Corbyn in the interim to come to a compromise and avoid a hard Brexit. 

On Friday, the U.S. and China meetings in Washington wrapped up, with President Trump’s economic advisor Kudlow indicating that both side are moving closer and closer to a deal.  The parties are expected to continue discussions following the meetings which saw some progress made related to intellectual property rights.  Trump added that the latest round of talks yielded significant progress and he believes an agreement could be signed in the next four to six weeks.
 
WTI crude prices are tracking higher again this morning, currently above $63/barrel.  Production custs by OPEC have largely driven the rally over the past four months.  The larger OPEC+ group is expected to hold a key meeting in May, although the strong oil demand in Asia will allow the oil market to balance supply and demand.  Saudi Arabia could halt production cuts going forward as its sees oil markets moving in the right direction in 2019.
 
The Canadian corporate credit market remained stable on Friday with no additional new issues to end the week.  The market continues to focus on TransCanada with expectations that the issuer will look to issue bonds fresh off the recent downgrade.  There were no notable trading themes to end the week, although the positive tone in equity markets translated to continued picking away at corporate credit names.  Corporate credit spreads ended the day mostly unchanged on Friday with the tone opening a bit softer to start this morning.

Equity Markets:

  Index Level % Change QTD YTD Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
S&P 500 2,892.74 0.46% 2.09% 16.02% 6.64% -0.76%

3.43%

7.71% -13.52% 13.65%
TSX

16,396.15

0.52%

1.88%

15.42%

4.44% -4.52%

6.77%

-0.56% -10.11 13.27%

Rates:

 

Today

% Change

QTD change

YTD change

Q4 2017

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Q1 2019

Canada 5 Year

1.58%

0.01%

0.06%

-0.31% 1.87% 1.97% 2.07% 2.34% 1.89% 1.52%
Canada 10 Year 1.71% 0.01% 0.09% -0.26% 2.05% 2.09% 2.17% 2.43% 1.97% 1.62%
Canada 30 Year 1.99% 0.01% 0.10% -0.20% 2.27% 2.23% 2.21% 2.42% 2.18% 1.89%
30yr Generic Corporate A rated Spread 1.50% 0.00% 0.00% 0.00% 1.21% 1.24% 1.28% 1.30% 1.50% 1.50%
30yr All-in Corporate A rated Yield

3.49%

0.01% 0.09% 0.09% 3.48% 3.47% 3.49% 3.72% 3.68% 3.39%
US 10 Year 2.50% 0.01% 0.10% -0.18% 2.41% 2.74% 2.86% 3.06% 2.69% 2.41%
CDX IG 60.453 0.415                

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.