Daily Market Commentary

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Get a complete view of the world as seen through the eyes of our investment professionals each and every business day shortly after the opening bell.

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.​​​​​

  • Equity markets are trading down at the open...

    Tuesday, August 16, 2016 - 11:13 EDT
    Equity markets are trading down at the open as bond yields increased by 1-2 bps. In July, UK CPI inflation rose to 0.6% y/y, a little above the consensus expectation but in-line with the Bank of England’s August Inflation Report forecast. Core CPI fell to 1.3% y/y from 1.4% y/y. CPI Data is consistent with significant move in the FX rate after the Brexit vote as the rate was expected to edge higher.
  • Asian markets opened the week...

    Monday, August 15, 2016 - 09:00 EDT
    Asian markets opened the week mixed and cautious with some equity indices traded up, but certainly not all. Japanese Q2 GDP data missed the consensus estimate of a gain of 0.7%, coming at an annualized +0.2% q/q, with business investments dropping sharply by 0.4%. The USD gained somewhat against most currencies except the yen. The latest GDP numbers suggest that the Japanese government and central bank’s stimulus actions appear not to be making much progress in delivering the promised growth.
  • Sales at U.S. retailers were little changed in...

    Friday, August 12, 2016 - 09:00 EDT
    Sales at U.S. retailers were little changed in July, as Americans flocked to auto dealers at the expense of other merchants. Retail sales were unchanged Month-over-month with ex-auto down 0.3%. The stalling purchases followed a 0.8% gain in June. Italian GDP disappointed, as Euro-area growth showed a 0.3% increase. As a result Treasuries are higher along with gold.
  • U.S. stock indexes rose amid...

    Thursday, August 11, 2016 - 09:00 EDT
    U.S. stock indexes rose amid better than expected earnings from Macy’s and Kohl’s corp. Tomorrow, we will get the U.S. retail sales release for July. The expectation is for +0.4%. However, the expectation continues to be more accommodative support from global central banks given global growth downgrades. Volumes continue to be strong in Canadian corps with decent activity throughout the curve, while new issuance took a momentary breather, which allowed clients to digest the previous day’s new supply. CDXIG26 is 0.2 tighter to 72.1.
  • U.S. index futures are little...

    Wednesday, August 10, 2016 - 09:00 EDT
    U.S. index futures are little changed as the earnings season approaches its end.
  • New issues continue to be vastly...

    Tuesday, August 9, 2016 - 09:00 EDT
    New issues continue to be vastly over-subscribed, the energy and communications sectors continue to consolidate and the rating agencies are lowering ratings (Bell). With the strong buying tone trend continuing and a slightly more positive tone in macro markets, we expect issuers to take advantage and issue. Yesterday, we saw Pembina Pipelines issue a $500mln 10yr bond which looked to have some decent concession. The deal performed on the break and tightened by 6bps with very light fills.
  • U.S. stock index futures advanced...

    Monday, August 8, 2016 - 09:00 EDT
    (open)
  • European stocks head for their largest...

    Friday, August 5, 2016 - 09:00 EDT
    (open) European stocks head for their largest two-day rally in two weeks on growing confidence that central banks will keep monetary policy supportive.
  • The Bank of England cut its key rate for...

    Thursday, August 4, 2016 - 09:00 EDT
    (open)
  • European markets are seeing a small...

    Wednesday, August 3, 2016 - 09:00 EDT
    (open)
  • Royal Bank of Australia cut their...

    Tuesday, August 2, 2016 - 09:00 EDT
    (open) Royal Bank of Australia cut their benchmark rate by 25bps to 1.5% as inflation remains subdued. The cut underscores the demise of its economic exceptionalism and is another country swept up by the wave of global disinflation. Policy makers had little choice as a strengthening currency threatens to push prices lower still. We suspect that the post-Brexit easing in monetary conditions coupled with the delayed U.S. rate hikes, influenced the RBA’s decision.
  • The U.S. commerce department surprised the...

    Friday, July 29, 2016 - 09:00 EDT
  • Although the statement by the Federal ...

    Thursday, July 28, 2016 - 09:00 EDT
  • European stocks are up and ...

    Wednesday, July 27, 2016 - 09:00 EDT
    (open)
  • The week started off slowly, with...

    Tuesday, July 26, 2016 - 09:00 EDT
    (open) The week started off slowly, with markets off of the record highs of last week during Monday’s trading. The British pound weakened after a Bank of England (“BoE”) member, Martin Weale, commented that next week’s rate decision is data dependent. As recent post-Brexit data releases have been quite weak, the market is expecting a 0.25% rate cut by BoE next week.
  • Equity market futures are pointing to a...

    Monday, July 25, 2016 - 09:00 EDT
    (open)
  • U.S. equity futures are pointing to a...

    Friday, July 22, 2016 - 09:00 EDT
    (open) U.S. equity futures are pointing to a positive open. Overnight, the Bank of Japan downplayed “helicopter” money as a form of stimulus. The Yen was higher as a result. In the UK, PMI showed the economy suffered a dramatic deterioration, however the FTSE rallied as easing is now expected from the Bank of England. The front end of the curve was better bid. Credit remains better bid in general as dealer inventories dwindle down. CDXIG26 is 0.25 wider to 71.8.
  • The ECB did not change their...

    Thursday, July 21, 2016 - 09:00 EDT
    (open)
  • U.S. index futures climbed as...

    Wednesday, July 20, 2016 - 09:00 EDT
    (open) U.S. index futures climbed as Microsoft and Morgan Stanley beat estimates, spurring optimism in corporate health. Credit continues to be well bid with telecom and Canadian Bank NVCC tighter by a couple of bps. Another ETF buyer came to market yesterday acquiring $30-$40mln of securities. Not huge amounts but in a market where there is very little product available, this will have an impact. CDXIG26 is 0.35 tighter to 71.15. With no supply on the horizon, we suspect credit spreads will continue to be better bid today.
  • In Europe, German investor confidence fell...

    Tuesday, July 19, 2016 - 09:00 EDT
    (open) In Europe, German investor confidence fell the most since 2012. All European markets are negative today. Risk assets were softer overnight as commodities weakened. Goldman Sachs reported stronger earnings, due to bond trading revenue beating estimates.
  • Friday, there continued to be...

    Monday, July 18, 2016 - 09:00 EDT
    (open) Friday, there continued to be substantial buying driven by ETF flows. These flows totaled $300-400 million CAD over the past week. Based on market tone this morning, we believe that the substantial buying by ETF’s is now complete. As there is no upcoming supply being discussed at present and roadshows scheduled for this week, we suspect that the trading sessions for the next few days will be quiet with a bias towards more buying. The tone for corporate bonds continues to be well supported.
  • European markets are weaker after...

    Friday, July 15, 2016 - 09:00 EDT
    (open) European markets are weaker after yesterday’s terror attack in Nice. Stephen Poloz in an interview with the Wall Street Journal commented that soaring home prices in Toronto and Vancouver won’t keep the Bank of Canada from cutting rates to stimulate the economy. The probability of the bank cutting rates is higher than raising rates in the near term. A drop in the currency could drain Canadian consumer’s purchasing power. That could cause a problem for the bank, which is counting on consumption to drive growth in 2016.
  • U.S. equity futures are pointing to a...

    Thursday, July 14, 2016 - 09:00 EDT
    (open)
  • Today, we’ll get the Bank of Canada policy...

    Wednesday, July 13, 2016 - 09:00 EDT
    (open) Today, we’ll get the Bank of Canada policy announcement and expect more dovish comments. Tomorrow, the Bank of England tomorrow will announce, and the market expects a cut of 25bps and verbiage around another cut in August. Despite this, credit in general remains better bid with yields at very low levels. We continue to see better buying of credit as the market continues to ride the stimulus rally. Royal Bank did a 5yr deposit note $1.75bln that was met with 69 buyers and broke a couple of bps tighter. CDXIG26 is 0.2 tighter to 70.9.
  • Risk assets continued to perform...

    Tuesday, July 12, 2016 - 09:00 EDT
    (open) Risk assets continued to perform well overnight. Asian markets were higher as the prospects of economic support from Japan increased. Earnings season begins this week, and so far Daimler has reported a significant beat with EBIT rising 5.6% year-over-year. Equities are poised to outperform today as the expectation for more stimulus from global central banks loom over the market.
  • The tone of the Canadian corporate credit market this...

    Monday, July 11, 2016 - 09:00 EDT
    (open) The tone of the Canadian corporate credit market this morning continues to be biased towards risk-on. CDXIG26 is 0.5 tighter to 72.8. In equity markets, the Nikkei closed up 4%, as the expectation of additional stimulus from the Bank of Japan increased.
  • Canadian employment came in at ...

    Friday, July 8, 2016 - 09:00 EDT
    (open) Canadian employment came in at a disappointing loss of 700 positions. Full-time jobs were down 40,100, while part-time was up by 39,400.  The unemployment rate dropped from 6.9% to 6.8%, driven by a decline in the participation rate from 65.7% to 65.5%.  Hours worked fell 0.4%, which is the biggest drop since last September.  Aggregate hours worked has not increased above December 2015 levels, a negative indicator of income growth which has repercussion on the consumer sector.   
  • There continued to be good two-way...

    Thursday, July 7, 2016 - 09:00 EDT
    (open) There continued to be good two-way corporate credit flows yesterday and it continues to be well bid. However provincial bonds continue to lag due to the expectation of issuance. Sobeys’ bonds are continuing to trade at very low volumes and at spreads significantly wider than the previous day. The expectation is that this credit may fall below investment grade.
  • As Brexit stress grows, yields are...

    Wednesday, July 6, 2016 - 09:00 EDT
    (open)
  • In a pledge to shore up financial stability...

    Tuesday, July 5, 2016 - 09:00 EDT
    (open)
  • Thursday we saw rates going lower as...

    Monday, July 4, 2016 - 09:00 EDT
    (open)
  • U.S. equities are pointing to a...

    Thursday, June 30, 2016 - 09:00 EDT
    (open)
  • The tone this morning in risk-on...

    Wednesday, June 29, 2016 - 09:00 EDT
    (open)
  • The final U.S. 1Q GDP release came in at...

    Tuesday, June 28, 2016 - 09:00 EDT
    (open)
  • The fallout from last week’s Brexit vote...

    Monday, June 27, 2016 - 09:00 EDT
    (open) The fallout from last week’s Brexit vote continues this morning with risk assets selling off and rates rallying further. So far, 10 year U.S. treasuries dropped below 1.5%, while the Canada 30 year bond touched historic lows.
  • Brexit aftershocks include Cameron quitting as...

    Friday, June 24, 2016 - 09:00 EDT
    (open)
  • U.S. equity futures are pointing ...

    Thursday, June 23, 2016 - 09:00 EDT
    (open) U.S. equity futures are pointing to a positive open as Britain’s EU referendum gets underway. Markets overnight were higher. Polling stations opened at 7a.m. and will close at 10p.m., London time. The first results are expected around midnight. Final results are due Friday at 7a.m U.K. time. Polling suggests the vote is finely balanced, even as financial markets indicate “Remain” camp is on course to win. CDXIG26 is 2.25 tighter to 76.9. We continue to see broad based buying in corporate credit.
  • After a relatively quiet overnight session...

    Wednesday, June 22, 2016 - 09:00 EDT
    (open)
  • Markets maintained their positive tone, as ...

    Tuesday, June 21, 2016 - 09:00 EDT
    (open) Markets maintained their positive tone, as risk-on assets rallied overnight, due to the growing gains of the “remain” side in polls relating to the U.K referendum. Yesterday, Bruce Power come out with a dual tranche dea, comprised of $600 million 5 year bonds and $400 million of 10 year bonds. The 5 year deal broke 10 bps tighter, with over $2 billion in demand and 60 buyers. We suspect that if the market’s tone remains positive, we may see some surprise issuance from companies taking advantage of current conditions.
  • Latest opinion polls would suggest that the...

    Monday, June 20, 2016 - 09:00 EDT
    (Open) Latest opinion polls would suggest that the likelihood of the U.K leaving the European Union is decreasing. We believe that the market will trade according to opinion polls over the next few days. But the tone today is better for risk assets with European equity markets up over 3%. Oil is over $50 and gold is down $12. CDXIG26 is 4.4 tighter to 78.7. We believe the corporate bond market will stand still until the Brexit vote. There is some issuance that is being talked about with some “non-deal” roadshows this week.
  • European and Asian equities are higher...

    Friday, June 17, 2016 - 09:00 EDT
    (open) European and Asian equities are higher overnight and Brexit concerns are somewhat abated. U.S. 10yr Treasuries are 2.5bps higher.
  • U.S. equity futures are pointing to a...

    Thursday, June 16, 2016 - 09:00 EDT
    (open)
  • The tone in the corporate credit marke...

    Wednesday, June 15, 2016 - 09:00 EDT
    (open) The tone in the corporate credit market continues to be risk-off as participants focus on Brexit, the most important current concern in global markets. Following a win for the “leave” side, the initial negative impact would likely be felt by U.K banks. But following the initial effects, the resulting linkages and compound effects little known at this point. The tail-end risk caused by the uncertainty is causing widespread concern in the market.
  • U.S. equity futures are pointing to a...

    Tuesday, June 14, 2016 - 09:00 EDT
    (open)
  • U.S. equity futures are pointing to a...

    Monday, June 13, 2016 - 09:00 EDT
    (open)
  • The Canadian unemployment rate hit its...

    Friday, June 10, 2016 - 09:00 EDT
     
  • Yesterday, markets focused on the initial...

    Thursday, June 9, 2016 - 09:00 EDT
    (open)
  • Today is the first official day that the...

    Wednesday, June 8, 2016 - 09:00 EDT
    (open)
  • U.S. equity futures are pointing to a...

    Tuesday, June 7, 2016 - 09:00 EDT
    (open) U.S. equity futures are pointing to a positive open as the rally in risk assets continued overnight. The flow of bonds was relatively moderate yesterday, with good 2-way flows in long utilities. In the primary market, we continued to see FRN issuance by banks, this time with BMO issuing 1B of a 1yr FRN at 3M CDOR+17 bps. By the end of the day, spreads finish a touch wider. CDXIG26 is 0.3 tighter to 74.3.
  • US equity futures are pointing to a...

    Monday, June 6, 2016 - 09:00 EDT
    (open) US equity futures are pointing to a positive open after a relatively mixed overnight session. Asian markets were lower after the weak Nonfarm payrolls number. European markets are mixed as sterling has fallen after opinion polls show more of the UK public is in favor of an exit from the EU. Oil is up 1.05%, while U.S. 10 year Treasuries are up 1.9bps to 1.72%.

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