All eyes this morning are on the Chair of the Federal Reserve

Posted: Wednesday, July 10, 2019 - 09:36 EDT

All  eyes this morning are on the Chair of the Federal Reserve, Jerome Powell, as he kicks off his semi-annual 2-day testimony to Congress at 10:00am.  The market expects Powell to give some kind of indication of a July cut,  as well as talk about global trade and growth, inflation, extraordinary tools and financial stability.  In addition, the Bank of Canada will come out with their policy announcement and Monetary Policy Report at 10am.  We expect no change, with remarks regarding a sluggish manufacturing sector along with an uncertain external backdrop, and therefore they will remain cautious. 

Global fixed income markets are weaker, led by Europe where France and Italy’s Industrial Production data came in stronger than expected.  Canadian credit remains resilient with market participants continuing to put money to work.  National Bank launched a 5yr Bail-in deal, raising $1bln, priced at curve +100bps and we saw better buying in higher yielding sectors such as Pipelines.  This morning TD Bank is issuing a 8yr covered bond issue in Euros. 

Equity Markets:

  Index Level % Change QTD YTD Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
S&P 500 2,979.63 0.12% 1.36% 20.15% -0.76% 3.43%

7.71%

-13.52% 13.65% 4.30%
TSX

16,545.21

0.50%

1.05%

17.45%

-4.52% 6.77%

-0.56%

-10.11% 13.29% 2.58%

Rates:

 

Today

% Change

QTD change

YTD change

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Q1 2019

Q2 2019

Canada 5 Year

1.59%

0.02%

0.30%

-0.30% 1.97% 2.07% 2.34% 1.89% 1.52% 1.39%
Canada 10 Year 1.62% 0.04% 0.15% -0.35% 2.09% 2.17% 2.43% 1.97% 1.62% 1.47%
Canada 30 Year 1.76% 0.04% 0.08% -0.42% 2.23% 2.21% 2.42% 2.18% 1.89% 1.69%
30yr Generic Corporate A rated Spread 1.40% 0.00% 0.00% 0.00% 1.24% 1.28% 1.30% 1.50% 1.50% 1.40%
30yr All-in Corporate A rated Yield

3.16%

0.04% 0.08% 0.08% 3.47% 3.45% 3.72% 3.68% 3.39% 3.09%
US 10 Year 2.10% 0.03% 0.09% -0.58% 2.74% 2.86% 3.06% 3.06% 2.69% 2.41%
CDX IG 54.373 0.527                

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.