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.​​​​​

  • U.S. non-farm payrolls added 103k jobs in March...

    Friday, April 6, 2018 - 09:36 EDT
    U.S. non-farm payrolls added 103k jobs in March, which was below the market expectations of 185k, and significantly lower than 326k gain in February. The March payroll growth was the worst in six months. However, average hourly earnings ticked higher to 2.7%, and the unemployment rate remained at 4.1%, the lowest level since 2000.  In March, Canada added 32k jobs, which is better than the market expectation of 20k. The headline numbers masks the 68k full time jobs created, which fully offset the 36k loss of part-time jobs.
  • Equity markets recovered yesterday afternoon...

    Thursday, April 5, 2018 - 08:56 EDT
    Equity markets recovered yesterday afternoon as concerns eased around a potential trade war between the U.S. and China.  Trade representatives from both sides indicated that there is room for negotiation to avoid the proposed tariffs.  These taxes are not expected to take effect for a couple months giving both countries additional time to come to an agreement. St.
  • Fears of a full-blown trade war continue to mount this morning...

    Wednesday, April 4, 2018 - 09:29 EDT
    Fears of a full-blown trade war continue to mount this morning after China announced a fresh round of tariffs on U.S. imported goods.  The scale of these new measures matches the size put in place by the U.S. at approximately $50 billion that will see an additional 25% tax on products such as soybeans, automobiles and aircrafts.  Despite China’s previous rhetoric to engage the U.S. in discussion to resolve the dispute, the additional tariffs surprised many investors following the duty on 128 U.S.
  • Volatility remained a theme yesterday...

    Tuesday, April 3, 2018 - 08:56 EDT
    Volatility remained a theme yesterday with most U.S. equity indices moving back into correction territory.  Most of the focus persisted around a potential trade war after China implemented tariffs on U.S.
  • China has implemented its measures in response to the $50 billion tariffs....

    Monday, April 2, 2018 - 09:37 EDT
    China has implemented its measures in response to the $50 billion tariffs announced by the U.S. last month.  Although China and the U.S. were in the middle of negotiations that included protecting American intellectual property, the Chinese Commerce Ministry indicated that the U.S. did not respond to China’s request for consultation on the recently announced steel and aluminum tariffs that provided countries the ability to apply for an exemption.  China continues to advocate for open dialogue with the U.S.
  • The Ontario government released its budget yesterday ...

    Thursday, March 29, 2018 - 10:02 EDT
    The Ontario government released its budget yesterday that will see the province return to a deficit.  Leading up to the June election, the Liberals will enact additional spending programs that will focus on lowering healthcare and dental costs, along with free daycare.  The projected deficit for 2018/19 will be $6.7bil, with a similar shortfall for the next year.  This will represent a higher net debt to GDP ratio of 37.6% moving to 39% in 2021/22.
  • Growth is expected to remain positive in the U.S. this year...

    Wednesday, March 28, 2018 - 09:54 EDT
    Growth is expected to remain positive in the U.S. this year, as a result of tax reform that will drive business investment. The third reading of Q4 U.S.
  • The tone continues to be positive this morning...

    Tuesday, March 27, 2018 - 09:39 EDT
    The tone continues to be positive this morning, as fears of a global trade war continue to ease.  European markets are up over 1%, with North American equity futures pointing towards a positive open this morning.  U.S. White House official Navarro commented on the recent dispute and noted that the U.S. is actively engaged with China on fixing the trade gap.  Overall, despite the potential tariffs, he still sees growth for the U.S.
  • The selloff in the equity markets continued...

    Monday, March 26, 2018 - 09:01 EDT
    The selloff in the equity markets continued on Friday on fears of a global trade dispute.  The TSX was lower by 1.14% and the S&P500 down by 2.10%.  The tone this morning is cautiously optimistic following news from Treasury Secretary Mnuchin indicating a deal could be made with China to avoid the previously announced $50 billion of tariffs on Chinese imported goods.  China has noted that it will retaliate against the U.S. tariffs by taxing approximately $3 billion of U.S.
  • Equity markets sold off yesterday...

    Friday, March 23, 2018 - 09:07 EDT
    Equity markets sold off yesterday with the S&P500 lower by 2.52% and the TSX down by 1.76%.  President Trump announced that he plans to unveil up to $60 billion of tariffs on Chinese imported goods into the United States.  The U.S. is accusing China for intellectual property theft and could levy taxes up to 25%.  Trump is also vying for support from trade allies including Europe and Japan to place additional pressure on China.  This morning, fears of a trade war continue to be fueled by China’s response by taxing up to $3 billion of U.S. imported goods. 
  • The FOMC raise the Fed Funds rate by 25bps...

    Thursday, March 22, 2018 - 09:05 EDT
    As expected, the FOMC raised the Fed Funds rate by 25bps yesterday, although the statement held a more dovish tone than investors were expecting leading up to the policy announcement.  The rhetoric was changed to indicate that economic activity is now running at a “moderate rate” compared to “solid rate” in the previous statement.  The median dot plot chart continues to signal an additional two rate hikes in 2018, with both headline and core inflation running below the two percent target on a 12-month basis.  However, inflation should stabilize towards the Fed’s target over t
  • The Canadian dollar is strengthening this morning...

    Wednesday, March 21, 2018 - 08:52 EDT
    The Canadian dollar is strengthening this morning following reports yesterday that the Trump administration plans to eliminate the expectation that vehicles made in Canada and Mexico contain at least 50% U.S. content as part of the ongoing NAFTA negotiations.  This demand has been one of the most contentious topics related to the NAFTA talks, which is providing optimism that the three countries can now move forward to reach an agreement.  As a result, the Canadian government yields are also 2-3bps higher across the curve with the 10-year Canadian yields currently at 2.23%.
  • There were reports that the Trump administration plans to impose a $60 billion tariff on Chinese imported goods

    Tuesday, March 20, 2018 - 09:09 EDT
    There were reports late yesterday that the Trump administration plans to impose a $60 billion tariff on Chinese imported goods, which is stoking renewed worries that the U.S. will embark on trade wars against its partners.  Throughout Trump’s presidential campaign, he has indicated that the U.S. has held a large trade deficit with China, although some business leaders have warned that imposing tariffs will increase costs for companies as well as prices for consumers.  At the current junction, Premier Li has indicated that China will work with the U.S.
  • The focus this week will be on the Federal Reserve

    Monday, March 19, 2018 - 08:56 EDT
    The focus this week will be on the Federal Reserve, which will hold its policy announcement on Wednesday.  This is Jerome Powell’s first FOMC meeting, with investors expecting the Fed Funds rate to increase by 25bps.  Implied probabilities this morning are pricing a 100% chance that the Fed will raise rates.  Economic data has been mixed to start the year; however last month’s jobs data continued to show strength.  More importantly, the tone of the statement along with the press conference will be important as Powell has indicated that he is open to increasing rates four
  • The U.S. dollar continued to strengthen against the Canadian dollar...

    Thursday, March 15, 2018 - 08:56 EDT
    The U.S. dollar continued to strengthen against the Canadian dollar yesterday, currently sitting just below $1.31 USD/CAD.  Speculation that President Trump has removed his National Security Advisor McMaster is increasing worries that Trump will continue to embark on trade wars.  This follows recent events that included the firing of Tillerson and Cohn resigning.
  • U.S. retail sales for February fell by 01%..

    Wednesday, March 14, 2018 - 09:39 EDT
    U.S. retail sales for February fell by 0.1% which was below expectations of 0.3%.  Despite the weaker data, last month’s number was revised higher by 0.2% to 0.1%.  Purchases of automobiles fell by 0.9%, which is the second straight month of declines, reinforcing that auto sales may decline following record numbers over the past several years.
  • U.S. CPI for February increased by 0.2% for the month...

    Tuesday, March 13, 2018 - 09:05 EDT
    U.S. CPI for February increased by 0.2% for the month, which matched expectations. This is a slight decline from last month’s increase of 0.5%, with year-over-year headline inflation tracking at 2.2% in February.  Inflation continues to creep steadily higher with increases broadly across all sectors.
  • The economic calendar is light to begin the March break week...

    Monday, March 12, 2018 - 08:49 EDT
    The economic calendar is light to begin the March break week, although both Asian and European equity markets continue to track higher as a result of strong jobs data reported in the U.S. on Friday.  Ten year U.S. Treasury yields have also moved higher during the month, currently at 2.89%, after reaching a low to start the month at 2.80%.  Mid-week, the U.S.
  • U.S. non-farm payrolls saw an increase of 313k in February

    Friday, March 9, 2018 - 09:39 EST
    U.S. non-farm payrolls saw an increase of 313k jobs in February, the highest job increase since mid-2016. The strong job growth was in-line with low initial jobless claims, strong ISM factory jobs growth, and strong ADP results. However, weaker than expected wage growth remained a downward risk. February’s average hourly earnings at 2.6% was under the 2.8% survey median, and 2.9% in January. The Canadian Labour Force Survey saw an increase of 15k jobs in February. Unlike the 137k drop in January, this increase was in-line with the longer term average gain of around 20k.
  • Yesterday the BoC left the overnight interest rate unchanged at 1.25%

    Thursday, March 8, 2018 - 09:12 EST
    The Bank of Canada released its monetary policy announcement yesterday that left the overnight interest rate unchanged at 1.25%.  The Bank will remain cautious as developments on trade are a growing source of uncertainty.  The BOC also flagged lower than typical wage growth as well as a recent deceleration in household credit growth.  Overall, higher interest rates should still prevail going forward although time is needed to fully assess the impact of the new housing measures including the economy’s sensitivity to higher rates.  The announcement by President Trump surro
  • The BoC will release its monetary policy statement this morning

    Wednesday, March 7, 2018 - 08:14 EST
    The Bank of Canada will release its monetary policy announcement this morning, although it is expected that the BOC will stay on hold with only an 11% probability that rates will rise by 25bps.  The recent news that the U.S. plans to impose new tariffs on imported steel and aluminum should give the BOC additional reason to hold the overnight rate.  In previous statements, Governor Poloz has highlighted the risks of NAFTA negotiations, and while they are still in the overhang, a potential trade war ignited by the U.S.
  • North American equity markets rallied yesterday...

    Tuesday, March 6, 2018 - 09:26 EST
    North American equity markets rallied yesterday, with both the S&P500 and TSX increasing by over 1%.  Despite the Trump Administration’s protectionist rhetoric to increase tariffs on imported steel, aluminum and European cars, equity markets in Europe continued to show strength this morning.  Most of the optimism followed House Speaker Ryan’s comments that he did not support the new tariffs and President Trump should consider the possibility of igniting a trade war.  Ryan fears that new tariffs could push inflation higher and slow growth, which would undo the positive ben
  • The tone this morning is cautious...

    Monday, March 5, 2018 - 08:44 EST
    The tone this morning is cautious following the announcement late last week from the Trump administration that they wished to impose a tariff on imported steel and aluminum.  The tariff levied is expected to be 25% on steel and 10% on aluminum.  The announcement could stall the seventh round of NAFTA negotiation, which concludes today, as neither Canada nor Mexico are expected to be exempt. Both Canada and Mexico are two of America’s largest sources for imported steel and aluminum.  To further the potential trade war between the U.S.
  • Equity markets are lower this morning following news that the U.S. plans to impose tariffs..

    Friday, March 2, 2018 - 09:00 EST
    Equity markets are lower this morning following news that the U.S. plans to impose tariffs on steel and aluminum imports.  Adding fuel to the fire, President Trump tweeted following the announcement that ‘trade wars are good’.  Although Canada is currently in the seventh round of NAFTA negotiations this week, it is unclear whether the new tariffs will apply to NAFTA countries.  Both Canada and Mexico are two of the largest exporters of steel to the U.S.
  • U.S. Core PCE deflator in Januray remained at 1.5% year over year

    Thursday, March 1, 2018 - 09:16 EST
    The U.S. Core PCE deflator in January remained at 1.5% year over year, although on a monthly basis the measure was up 0.3%.  The Fed continues to see underlying pricing pressures that should move the inflation measure higher over time, although since 2012 it continues to track below the 2% target.
  • Yesterday, the Liberals submitted their third federal budget

    Wednesday, February 28, 2018 - 09:00 EST
    Yesterday, the Liberals submitted their third federal budget, although there were very few changes from the update provided from last fall.  The projected deficit for the 2018-19 fiscal year will be -$18.1bil which is down from the current year of -$19.4bil.  The much anticipated Infrastructure Bank that was part of the Liberal election platform has again been pushed back, although this can been utilized as a fiscal policy tool in later years if economic growth slows.  Budget projections expect real GDP growth in the 1.5%-2.0% range with oil prices reaching $59/barrel in 2020
  • Two more Canadian banks reported this morning...

    Tuesday, February 27, 2018 - 09:31 EST
    Two more Canadian banks reported this morning that continued the trend of strong earnings to start the year.  Scotiabank reported resilient Q1/2018 ROE of +16.2% driven by positive operating leverage from cost saving initiatives along with loan growth in both the Canadian and International banking divisions.  As a result of the recent rate increase by the BOC, net interest margins increased by several basis points.  The Global Banking and Markets division saw net income increase by 16% over the quarter as lower volatility muted trading volumes previously.  Scotia’s CET1
  • The tone in both fixed income and equity markets thismorning is stable

    Monday, February 26, 2018 - 08:47 EST
    Canada will release its fiscal year 2018-19 budget preview tomorrow, that saw the last fall budget post a smaller than expected deficit for 2017-18.  Canada displayed stronger than expected growth last year as a result of a rebound in the energy sector.  Data out of Canada to start this year has been softer with employment declining due to higher minimum wages in Ontario as well as a weakening in home sales from the new OSFI B-20 mortgage rules.  On Friday, Canada will release its December GDP figures that are expected to increase marginally by 0.1%.
  • Canadian CPI for January declined to 1.7%

    Friday, February 23, 2018 - 09:58 EST
    Canadian CPI for January declined to 1.7%, from 1.9% in the previous month.  Although the headline number was higher than expectations of 1.5%, the data still points to lower price pressures.  Despite the higher minimum wage in Ontario pushing inflation higher in the services and restaurant sector, the rest of Canada saw more modest increases.  However, core CPI did move marginally higher as the common measure increased by 0.2%, to 1.8%. The average of the three core CPI measure is now hovering at the highest levels since September 2016.
  • Canadian retail sales for December declined by 0.8%

    Thursday, February 22, 2018 - 09:27 EST
    Canadian retail sales for December declined by 0.8%, which was below expectations for a flat reading.  With the introduction of Black Friday sales in Canada, a lot of the retail activity has been pulled forward to November, which was revised 0.1% higher to 0.3%.  For the month of December, volume terms were also negative falling by 0.8%, while sales excluding motor vehicles were down 1.8%.  On a year-over-year basis, retails sales in 2017 were the strongest since 1997, increasing by 6.7% annually
  • It remains a relatively quiet week...

    Wednesday, February 21, 2018 - 10:02 EST
    It remains a relatively quiet week following family long weekend in both the U.S and Canada, while the Chinese market remains closed until February 22nd  for the Lunar New Year holidays.  The market today is focusing on the FOMC’s January meeting minutes, which will be released this afternoon at 2:00 pm, in particular, it is watching out for any indications of further rate hikes beyond the three times that the market is expecting.
  • Equity and fixed income markets were mostly quiet and stable on Friday...

    Tuesday, February 20, 2018 - 10:15 EST
    Equity and fixed income markets were mostly quiet and stable on Friday, leading up to the long holiday weekend.  Government yields globally continue to march higher to their highest levels over the past two years.  Canada ten year yields currently stand at 2.32%, while ten year Treasuries slowly approach the 3% mark, currently at 2.90%.  The economic calendar is rather light to start the week, with Canada reporting retail sales and inflation data on Thursday and Friday.  Investors will look for signs of further rate hikes by the BOC from the CPI data after last month’s f
  • The BoC Deputy Governor spoke yesterday...

    Friday, February 16, 2018 - 09:49 EST
    Bank of Canada Deputy Governor Schembri spoke yesterday and discussed the current policy mandate that targets inflation with framework renewal in 2021.  The key takeaways noted that the current policy framework continues to work well where the central bank targets a two percent inflation target.  Although the target is well understood, the target is renewed every five years and may give an opportunity for the Bank of Canada to review the objective, given that inflation expectations may drift away from 2% over time.  The Bank of Canada will access the economic costs of high in
  • The U.S. Producer Price Index for January came in at expectations

    Thursday, February 15, 2018 - 09:30 EST
    The U.S. Producer Price Index for January came in at expectations of 0.4%, with the prior month revised higher by 0.1% to flat.  January wholesale prices increased as a result of higher energy costs, which could translate into higher inflation moving forward.  Headline CPI in the U.S. reported yesterday was 2.1% y/y.  Core PPI that excludes food and energy prices also rose by 0.4% for the month.  On a year over year basis, core PPI tracked 2.2% which is maintaining the highest levels over the past five years.
  • U.S. headline inflation moved higher in January

    Wednesday, February 14, 2018 - 09:25 EST
    U.S. headline inflation moved higher in January, up 0.5% m/m, which led to year over year inflation of 2.1%.  Both monthly and yearly headline inflation numbers came in above expectations of 0.3% and 1.9%, respectively.  Energy prices in January pushed CPI higher along with apparel and transportation costs.  Core CPI year over year remained flat at 1.8%.  The stronger inflation numbers in January is reinforcing conviction that the Fed will raise interest rates in March.  U.S.
  • Equity markets rebounded yesterday

    Tuesday, February 13, 2018 - 08:58 EST
    Equity markets rebounded yesterday and calm returned to both fixed income and stocks following a volatile last week.  There were several central bank speakers this morning with ECB President Draghi indicating that Euro area employment is higher than ever as the economy continues to improve.  Despite EU growth expected to come in at 2.4% for 2017, Draghi noted that strong employment and economic data does conceal some underlying risks – more specifically, the quality of the jobs needs to be improved.  In the U.S.
  • The tone in equity markets this morning is positive

    Monday, February 12, 2018 - 09:42 EST
    The tone in equity markets this morning is positive compared with the large volatility witnessed last week.  Most European equity markets are up over 1% while North American equity futures are pointing towards a higher open as well.  Most of the sell-off last week was related to global worries of higher interest rates as 10-year U.S. Treasury yields ended the week flat at 2.85%.  However, yields in Canada and the U.S. are tracking a couple basis points higher as a result of the positive tone.
  • Canadian employment saw a decline of 88k jobs in January

    Friday, February 9, 2018 - 09:01 EST
    Canadian employment finally gave jobs back after a strong run of 17 straight months of positive additions.  Canadian employment saw a decline of 88k jobs in January that fell well below expectations of +10k.  Within the details, part time employment contributed to all the jobs losses, declining -137k, while full-time added +49k.  The participation rate declined by 0.3% to 65.5% which alleviated pressures on the unemployment rate increasing from 5.7% to 5.9%.  Average hourly wages in January increased positively by 3.3% driven by increases in minimum wage in Ontario.&nbsp
  • Several Fed speakers have stated that 3 rate hikes would be appropriate in 2018

    Thursday, February 8, 2018 - 09:02 EST
    There were several Fed speakers, starting with Kaplan, who noted that three rate hikes would be appropriate in 2018.  On the curve, he said that the Fed does not wish to be in a situation where they would invert the yield curve, although he believes that the U.S.
  • Volatility in global equity market remains

    Wednesday, February 7, 2018 - 08:35 EST
    Volatility in global equity markets remains even as North American equity indices rebounded to end the day higher.  The S&P500 was up 1.74% while the TSX increased by 0.19%.  European equities are positive to start today although U.S.
  • Clone of Global equity markets continue to be under pressure

    Tuesday, February 6, 2018 - 08:37 EST
    The global sell-off in risks assets continues this morning after the TSX was down 1.74% and the S&P500 was lower by over 4% yesterday.  Overnight, Asian equity markets saw more downward pressure and most European equity indices are down over 2%.  The last couple trading days have seen significant volatility with the VIX index sitting at 49 this morning – levels not seen since 2015.  The concerns remained around rising bond yields globally as a result of higher inflation that could diminish stock valuations.  Government of Canada and U.S.
  • Global equity markets continue to be under pressure

    Monday, February 5, 2018 - 09:02 EST
    Global equity markets continue to be under pressure this morning following one of the largest sell-offs in the Dow Industrial Average since 2009.  In addition, the TSX was down 1.61% while the S&P500 fell over 2% on Friday.  This morning, European equity markets are lower by over 1%, while futures are pointing to a negative open for North American equity markets also.
  • U.S. non-farm payrolls for January saw an increase of 200k

    Friday, February 2, 2018 - 08:59 EST
    U.S. non-farm payrolls for January saw an increase of 200k, which was above expectations of +180k.  The unemployment rate remained unchanged at this cycle’s low of 4.1%.  The increase in average hourly earnings added to the positive momentum in the jobs report, which saw a year over year increase of 2.9% that moved higher from the 2.7% reading last month.  Wages increased in January at the strongest pace since June 2009.  The solid tone of today’s release reinforces the Fed’s intention to increase rates by 25bps at the March meeting.  In addition, the U.S.
  • The Federal Reserve released its monetary policy decision yesterday

    Thursday, February 1, 2018 - 09:09 EST
    The Federal Reserve released its monetary policy decision yesterday afternoon and decided to leave the Fed Funds Rate unchanged.  The FOMC statement reiterated that the U.S.
  • The FOMC will hold its rate decision later this afternoon

    Wednesday, January 31, 2018 - 08:34 EST
    The FOMC will hold its rate decision later this afternoon.  This meeting will be the final one for Yellen, who will pass the baton to Jerome Powell.  As a result, the Fed is not expected to make any drastic changes to the Fed Funds Rate as current implied probabilities only indicate a 3.8% chance that rates could be increased by 25bps.  Within the statement, investors will continue to look for clues on how the FOMC views inflation expectations, where core PCE released earlier this week is still below the 2% target.  Otherwise, President Trump held his first State of the
  • NAFTA representatives commented that good progress had been made...

    Tuesday, January 30, 2018 - 09:07 EST
    After wrapping up the sixth round of NAFTA negotiations yesterday, representatives from the three countries commented that good progress had been made although at a very slow pace.  Canadian Foreign Minister Freeland did remark that there were still some gaps to resolve and is expected to speak later today.  The U.S. Trade Representative Lighthizer shed some light on the current proposal to have 85% of new vehicles made in North America and 50% originating from the U.S.
  • U.S. core PCE held flat over the year at 1.5%

    Monday, January 29, 2018 - 08:59 EST
    The U.S.
  • Canadian CPI for December saw a decline of 0.4%

    Friday, January 26, 2018 - 08:53 EST
    Canadian CPI for December saw a decline of 0.4% with year over year headline inflation at 1.9%.  This was down slightly from the previous month’s figure of 2.1%.  December is typically a weaker month for inflation data, as the Bank of Canada expects CPI to hover around the 2% range over the next two years.  Also positive in the details was core inflation that saw all three measures move higher by about 0.1%.  The first look at annualized fourth quarter GDP in the U.S.
  • BoC Governor Poloz spoke this morning

    Thursday, January 25, 2018 - 09:04 EST
    Bank of Canada Governor Poloz spoke this morning on CNBC and commented on the recent decision to increase the overnight rate by 25bps.  At this current juncture, the BOC is totally data dependent, so the recent string of strong economic data reinforces the central bank’s decision to raise rates.  However, Poloz reiterated that it is important not to be mechanical about rates or to use strict rules.  Ultimately, some of his biggest concerns include NAFTA, household debt and cyber security risk.  The BOC is certain that the economy will be more sensitive to rate hikes with
  • The sixth round of NAFTA negotiations continue today

    Wednesday, January 24, 2018 - 08:53 EST
    The sixth round of NAFTA negotiations continue today, although there have been few headlines emerging from the talks.  Despite this, many of the world leaders have gathered in Davos this week with 11 members announcing an agreement to save the Trans-Pacific Partnership pact.  Previously, President Trump publicly noted his displeasure for TPP and that the U.S. will not participate in the trade deal expected to be signed in early March.  Prime Minister Trudeau indicated that Canada will partake in TPP.  In the U.S.

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