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.​​​​​

  • The FOMC releases its monetary policy statement this afternoon

    Wednesday, July 26, 2017 - 08:57 EDT
    The FOMC releases its monetary policy statement this afternoon, although the expectation is that the Fed will leave rates unchanged.  However, investors will be interested if there will be any details on whether the central bank will begin its tapering program as early as September.  The U.K.
  • The Canadian dollar continues to strengthen

    Tuesday, July 25, 2017 - 08:26 EDT
    The Canadian dollar continues to strengthen amid expectations that the Bank of Canada will further tighten monetary policy, while the Canadian economy shows signs of additional strength.  The CAD currency moved above $0.80 against the U.S.
  • Investors will be watching for the FOMC policy announcement...

    Monday, July 24, 2017 - 09:25 EDT
    Investors will be watching for the FOMC policy announcement this coming Wednesday.  Although the probability that the Fed will hike rates this meeting is next to nil, what is important will be any additional details on the steps towards balance sheet normalization.  The Fed previously provided details on how they will begin to reduce the reinvestment of maturities, however timing of when tapering will begin has yet to be decided.  There are also questions surrounding whether the FOMC will continue to hike rates jointly with the balance sheet reduction.  This coming Frida
  • Canadian headline inflation continues to run softer in Canada...

    Friday, July 21, 2017 - 10:11 EDT
    Canadian headline inflation continues to run softer in Canada, posting an increase of 1% year-over-year for June, just below expectations of +1.1%.  Inflation tracked lower from the previous reading of 1.3%, with June’s number the slowest since October 2015.  CPI was driven by declines in energy and gasoline, as well as clothing/footwear.  Core CPI-Common posted an increase of 1.4% year-over-year.  BOC Governor Poloz previously indicated that the factors currently holding inflation lower are temporary, with the expectation that the measure will move back towards the 2% t
  • The European Central Bank left rates unchanged this morning...

    Thursday, July 20, 2017 - 10:47 EDT
    The European Central Bank left rates unchanged this morning, and continues to maintain its quantitative easing program at 60 billion euros every month.  The statement maintained some dovish commentary, indicating that quantitative easing can be increased in size and duration if the outlook worsens.  Markets previously reacted to remarks by Draghi, where he spoke about gradual reductions in stimulus as the economy continues to grow.  The ECB has made is clear that it will continue to hold interest rates near zero well after QE purchases end.  Investors now await the upcom
  • Morgan Stanley is the last of the big five banks in the U.S. to report...

    Wednesday, July 19, 2017 - 09:26 EDT
    The Bank of Japan begins its monetary policy meeting and outlook report today and tomorrow.  Inflation in Japan still remains low, rising 0.4% year-over-year for the last reported data in May.  Previously, Governor Kuroda indicated that it is still premature to discuss how the BOJ will eventually manage the reduction of monetary stimulus, and a 1% rise in long term yields would destroy approximately 23 trillion yen of bond value held on the balance sheet.  The ECB also holds its monetary policy meeting tomorrow.  In late June, Draghi indicated in a speech that reflationa
  • The Canadian dollar continues to rally...

    Tuesday, July 18, 2017 - 09:39 EDT
    The Canadian dollar continues to rally against the U.S.
  • China GDP was released overnight, coming in at 6.9%...

    Monday, July 17, 2017 - 10:08 EDT
    China GDP was released overnight, coming in at 6.9% for the second quarter, above expectations of 6.8%.  Growth was driven by industrial production, business investment, and retail sales.  The Chinese consumer continued to spend, as sales rose 11% in June from a year earlier.  GDP growth has now posted back to back quarters of 6.9% annualized growth, which is above the 6.5% growth target for 2017 provided by The People’s Bank of China.  Industrial production was also strong for Q2 growth, driven by recovering exports.  Despite the strong growth data, President Xi co
  • U.S. inflation came in slightly below expectations

    Friday, July 14, 2017 - 09:25 EDT
    U.S. inflation came in slightly below expectations at 1.6% y/y versus consensus of 1.7%, while core inflation continues to track below the Fed’s target at 1.7%.  Drops in airfares, vehicles sales and wireless phone services contributed to the weaker CPI number, as the last increase to core inflation was back in January.  Energy prices also fell by 1.6%, while real hourly wages for June increased by only 0.8% year over year.  Also negative were U.S.
  • The BoC increased the Overnight Rate by 25 basis points

    Thursday, July 13, 2017 - 08:55 EDT
    The Bank of Canada increased the Overnight Rate by 25 basis points yesterday to 0.75%.  The Bank acknowledged the recent softness in inflation but judges this to be temporary.  The statement also noted that the Canadian economy has been robust, fueled by household spending and as a result, significant economic slack has been absorbed.  Business investment has been slow to improve during this recovery; however the most recent Business Outlook Survey shows that companies are becoming more supportive of additional spending.  The Monetary Policy Statement increased growth fo
  • The BoC will release its policy statement this morning

    Wednesday, July 12, 2017 - 09:10 EDT
    The Bank of Canada will release its policy statement this morning, with a 90% probability of a 25bps rate hike.  With the market already pricing in that the Bank will raise rates this meeting, the tone of today’s statement will be important.  If Poloz continues to deliver a more hawkish tilt, investors will look for clues on the path of future rate hikes.  Even with the softer inflation in Canada, Poloz previously indicated that the output gap will continue to narrow with inflation increasing to the BOC’s target over the next two years.  The Bank of England deputy govern
  • Oil prices continue to be pressured

    Tuesday, July 11, 2017 - 09:15 EDT
    Oil prices continue to be pressured and have been unable to sustain levels above $45/barrel.  Saudi Arabia has told OPEC that oil drilling has exceeded its production limit for the first time since the agreement to cut global oil supply.  In June, Saudi Arabia increased production from 9.88 million barrels a day to 10.07 million barrels, which was above the limit of 10.058 million. 
  • All eyes will be on the Bank of Canada this coming Wednesday

    Monday, July 10, 2017 - 08:43 EDT
    All eyes will be on the Bank of Canada this coming Wednesday as the monetary policy release is expected to announce a 25bps rate increase in the Overnight Rate.  OIS implied probabilities currently have a 93% chance that the Bank will raise rates this coming meeting.  Meanwhile, oil continues to track near the low end of the range over the past year, with WTI crudes prices currently around $43.75/barrel.  Sentiment for oil continues to be negative even following OPEC’s announcement that Libya and Nigeria may be requested to cap their production.
  • Canadian employment numbers continue to soar

    Friday, July 7, 2017 - 09:06 EDT
    Canadian employment numbers continue to soar adding 45.3k jobs in June, higher than expectations of +10k.  The Majority of the jobs added were part-time at +37k, while full-time employment increased +8k.  On average, the Canadian economy has added approximately 31k jobs per month this year.  Also positive was the decrease of 0.1% in the unemployment rate to 6.5% even though the participation rate increased by 0.1% to 65.9%.  Wages for Canadian full time employment rose by 1% for the month.  With today’s encouraging employment release, expectations for a potential ra
  • Rates in Canada continue to move higher this morning

    Thursday, July 6, 2017 - 08:39 EDT
    The FOMC minutes released yesterday gave evidence that there is no strong conviction towards when the normalization of the balance sheet will occur.  Several Fed members expect the start of the reduction of the balance sheet to begin in a “couple of months”, while some favoured “later in the year”.   Most members viewed the softness in inflation as transitory, and as a result unwinding of the balance sheet could occur as early as September.   The minutes from the ECB meeting were released this morning, with members consciously considering removing the pledge to incr
  • The FOMC will release its minutes from the June meeting

    Wednesday, July 5, 2017 - 08:56 EDT
    Today, the FOMC will release its minutes from the June meeting, where the central bank raised the Fed Funds Rate by 25bps and provided details on how they plan to normalize the balance sheet.  Precise timing for the potential reduction of the balance sheet has been left relatively vague, so investors will be looking for clues that will trigger the start to the program.  Euro area composite PMI for June came in at 56.3 against expectations of 55.7.  Output increased for all nations covered in the survey for the first time in over three years.  The PMI number confirms that
  • Governor Poloz continues to gives indications of a potential rate hike

    Tuesday, July 4, 2017 - 10:29 EDT
    Governor Poloz continues to give indications of a potential rate hike by the Bank of Canada on July 12.  He reiterated Deputy Governor Wilkins’ comparison of a car driving to a red light and easing up on the accelerator instead of waiting for the last second to stop.  He associated this with where he anticipates the Canadian economy will be 18-24 months from now, so a natural rising of rates needs to occur before that time.  Inflation has continued to run lower than the Bank’s 2% target, but again Poloz had some hawkish comments that the Bank would be two years behind in reac
  • The Canadian dollar continues to rally

    Friday, June 30, 2017 - 09:03 EDT
    The Canadian dollar continues to rally following increased expectations that the Bank of Canada will raise rates this upcoming July meeting.  The CAD/USD exchange sits just above $0.77, after falling below $0.73 back in May.  Also pushing the Canadian dollar higher are oil prices that currently stand at $45.23/barrel after dropping below $43/barrel a week ago.  Canadian April GDP came in at 3.3% year over year just below expectations of 3.4%.  Details of the GDP report confirm the central bank’s view that a recovery from the oil shocks are evolving.  The mining sect
  • Central bank commentary continues to drive yields higher

    Thursday, June 29, 2017 - 09:02 EDT
    Central bank commentary continues to drive yields higher this morning, following hawkish comments from the Bank of Canada, Bank of England and the ECB.  BOC Deputy Governor Patterson delivered a speech in Calgary and echoed a similar tone from other BOC officials over the past week.  She noted that the blows from oil shocks are largely behind us.  Probability of a rate hike in Canada for the July meeting has now increased to 75% from 67% yesterday.  BOE Governor Carney added yesterday that some removal of monetary stimulus is likely to become necessary.  The final r
  • Rates in Canada continue to move higher this morning

    Wednesday, June 28, 2017 - 09:42 EDT
    Rates in Canada continue to move higher this morning following BOC Governor Poloz’s comments.  He again reiterated that the 2015 rate cuts have done their job, and the Bank is now reaching a pivotal juncture towards a new interest rate decision.  Poloz added that excess capacity in the economy is steadily reducing, however NAFTA uncertainty is still holding business investment back.  Two year Canada yields are 11bps higher from two days ago, while 10 year Canada yields are 15bps higher than Monday.  San Francisco Fed President Williams added bullish commentary yesterday
  • President Draghi called for continued Euro-area stimulus

    Tuesday, June 27, 2017 - 09:16 EDT
    During the ECB’s Forum on Central Banking, President Draghi called for continued Euro-area stimulus, noting that support is still necessary even though economic growth has improved.  Although reflationary forces are now pointing to a strengthening and broadening recovery, persistent monetary policy will still be necessary to achieve the central bank’s inflation objective.  Draghi did add that most factors currently dampening inflation are temporary and left room for policy changes such as the reduction in the pace of stimulus when appropriate.  In the U.K., the BOE has announ
  • The U.K. conservative party has struck a deal

    Monday, June 26, 2017 - 09:00 EDT
    The U.K.
  • Canadian CPI continues to be weak, posting an increase of 1.3% in May...

    Friday, June 23, 2017 - 10:02 EDT
    Canadian CPI continues to be weak, posting an increase of 1.3% in May, against expectations of +1.5%.  Gasoline prices fell by 4% in May, although year over year gas prices are still up by 6.8%.  Food inflation was mildly higher at +0.6% for the month, although down 0.1% year over year.  The common measure of core CPI also came in lower than expected at +1.3%, and fell to the slowest pace since 1999.  This follows yesterday’s strong Canadian retail sales number, which saw increases in both volume and price terms.  Retail sales ex autos were extremely strong, increas
  • Prime Minister May will meet with other European Union leaders today...

    Thursday, June 22, 2017 - 10:55 EDT
    Prime Minister May will meet with other European Union leaders today in Brussels, where she will walk through the principles in her approach towards Brexit.  The details of the plan will be published next Monday and allow the British parliament to debate the bill.  Passing the bill will be critical for Theresa May’s survival, as failure to do so would incite a lack of confidence, forcing her to step down.
  • Dallas Fed President Kaplan spoke yesterday

    Wednesday, June 21, 2017 - 09:15 EDT
    Dallas Fed President Kaplan spoke yesterday and noted that the muted 10yr Treasury yield suggests expectations of sluggish economic growth.  He was glad that the Fed increased rates last meeting but is willing to be patient moving forward.  Weak inflation is expected to be transitory, although Kaplan wishes to see data confirmation driving prices higher from wage growth.  Overall, a more gradual rate hike schedule will help economic expansion last longer.  The BOE chief economist Haldane in a speech this morning indicated he was in favour of a rate increase as early as J
  • Today marks the second day of Brexit

    Tuesday, June 20, 2017 - 08:43 EDT
    Today marks the second day of Brexit with an agreement from both the U.K.
  • Brexit negotiations officially begin this morning

    Monday, June 19, 2017 - 08:27 EDT
    Brexit negotiations officially begin this morning in Brussels, a year after the vote for the U.K. to leave the Eurozone.  Although very preliminary, Theresa May will lay out the legislative process with the U.K.
  • Overseas buyers purchased $10.6bil of Canadian securities

    Friday, June 16, 2017 - 09:39 EDT
    Overseas buyers purchased $10.6bil of Canadian securities in April, down from the prior month purchases of $15.1bil.  The breakdown included buying of just under $13bil of bonds, offset by selling of $1.3bil of equities and $1.1bil of money market paper.  Year to date, investment in Canadian securities has totaled $71.1bil.  Canadian dollar strength continues to hold, following the Bank of Canada’s comments that they will potentially look at normalizing monetary policy later this year.  Probability of a rate hike by the end of the year has climbed significantly from 29%
  • As expected, the Fed raised rates by 25bps yesterday

    Thursday, June 15, 2017 - 08:35 EDT
    As expected, the Fed raised the Fed Funds rate by 25bps yesterday, with the target range at 1%-1.25%.  The statement did address that core inflation continues to run below their 2% target, but Yellen dismissed the recent softness in inflation as driven by transitory factors.  The FOMC also added that it has detailed plans to normalize the balance later this year, given that data is developing as expected.  Yellen also added during the press conference that normalizing the balance sheet could start “relatively soon” if the economy continues to strengthen.  The FOMC will i
  • 94.8% probability that the Fed will raise rates today

    Wednesday, June 14, 2017 - 09:08 EDT
    Bank of Canada Governor Poloz spoke yesterday but did not reiterate deputy governor Wilkins’ comments from the prior day.  However, he did not provide any reason for investors to think differently either.  He indicated there are still two elements missing from the current recovery.  The two factors are strong exports and greater evidence of business investment that have both stalled from the uncertain outlook with the U.S.
  • The Bank of Canada senior deputy Wilkins spoke yesterday

    Tuesday, June 13, 2017 - 08:51 EDT
    The Bank of Canada senior deputy Wilkins spoke yesterday and brought a much more hawkish tone to the bank.  In her speech, she noted that as growth continues to broaden further, the Bank will begin assessing whether the current monetary stimulus policy in place is still required.  Wilkens also indicated that core inflation is bottoming, and the assumption is the output gap will continue to narrow as GDP grows over time.  Job creation has also been strong to start the year, but uncertainty surrounding the U.S.
  • All eyes will be on the U.S. Federal Reserve this week

    Monday, June 12, 2017 - 08:32 EDT
    All eyes will be on the U.S. Federal Reserve this week, as the FOMC will release its policy statement on Wednesday.  The probability of the Fed raising rates this meeting currently stands just below 95%, as several Fed officials over the past month have indicated a willingness to normalize the Fed Funds Rate.  Also important will be how the Fed guides the markets towards the unwinding of the balance sheet along with whether the dot plots still indicate an additional hike later this year.  Wednesday will also be a busy economic calendar in the U.S.
  • Canadian employment surged in May

    Friday, June 9, 2017 - 09:40 EDT
    U.K.
  • Voters in Britain head to the Polls today

    Thursday, June 8, 2017 - 08:55 EDT
    Voters in Britain head to the polls today, after Prime Minister May called a snap election to consolidate power and form a majority government.  The latest poll by Ipsos indicated that the Conservatives would win 44% of the votes, just short of a majority.  The core issue of the election will be creating a team and vision to properly negotiate Brexit that will begin in a month’s time.  The ECB also announced its monetary policy statement today and indicated that it would not cut its record-low interest rates any further, while leaving rates unchanged.  For the time being
  • New supply continues to come to the Canadian corporate credit market

    Wednesday, June 7, 2017 - 09:04 EDT
    Canada and the U.S.
  • The tone this morning remains cautious

    Tuesday, June 6, 2017 - 08:44 EDT
    The tone this morning remains cautious ahead of the ECB’s monetary policy meeting and some uncertainty around whether U.K.
  • A quiet start to the week in-regards to economic data releases

    Monday, June 5, 2017 - 09:02 EDT
    A quiet start to the week in-regards to economic data releases, with oil continuing to show weakness despite several Arab countries cutting diplomatic and economic ties with Qatar for their alleged support of terrorist groups in the region.  This also follows this weekend’s London attacks further adding softness to equity markets in Europe this morning.  Later in the week, the U.K.
  • U.S. non-farm payrolls came in at +183k, lower than expectations

    Friday, June 2, 2017 - 09:23 EDT
    U.S.
  • Oil prices continue to be under pressure

    Thursday, June 1, 2017 - 11:00 EDT
    Oil prices continue to be under pressure following the underwhelming OPEC deal to cut supply for an additional nine months.  Libya’s largest oil field also increased production to the highest levels since 2014, further pushing oil prices even lower.  Data in the U.S., however, showed crude stockpiles have declined to ease inventory oversupply, falling 8.67 mi
  • Canadian Q1 GDP came in at 3.7%, below expectations of 4.2%

    Wednesday, May 31, 2017 - 08:55 EDT
    Canadian Q1 GDP came in at 3.7%, below expectations of 4.2%.  Last quarter’s GDP number was revised higher by 0.1% to +2.7%.  Household consumption rose at the fastest pace since 2010, increasing by 4.3% annualized, as improving job markets propped up consumer consumption.  Toronto and Vancouver housing also boosted residential investment at the strongest pace since 2012.  On a similar tone, business investment also grew at the fastest pace since 2012.  GDP for March posted a year over year increase of 3.2%.  Euro-area inflation in May came in at 1.4% year over
  • ECB President Draghi indicated that the euro-area recovery is well on its way

    Tuesday, May 30, 2017 - 09:06 EDT
    ECB President Draghi spoke yesterday and indicated that the euro-area recovery is well on its way.  However, he believes that key risks to the recovery are now weighted towards external factors, especially the “neo-protectionist stances that have been stated in the United States”.  Although Draghi spoke positively about the growth in Europe, he remained firmly convinced that monetary policy support including forward guidance is still necessary to absorb the slack in the economy.  Dallas Fed President Kaplan, this morning, noted that he still believes two more rate hikes are i
  • San Francisco Fed President spoke in Singapore

    Monday, May 29, 2017 - 08:48 EDT
    San Francisco Fed President Williams spoke in Singapore and commented on the future of the Fed’s balance sheet.  He believes that the unwinding process will start with baby steps later this year with the size of the overall balance sheet to be “much smaller” in about five years.  He also added that although there is good momentum in the economy, there is still a ways to go on inflation.  In regards to China, he is not overly concerned about slower growth, but rather the significant build-up of debt and risk in their financial system.
  • WTI crude prices continue to sell off this morning

    Friday, May 26, 2017 - 09:05 EDT
    WTI crude prices continue to sell off this morning, currently sitting at $48.61/barrel after closing at $51.36/barrel on Wednesday.  This follows yesterday’s OPEC announcement to continue oil supply reductions for an additional nine months.  Unfortunately, investors found the OPEC deal underwhelming and as a result, oil prices were down yesterday.  China has also announced that they are considering a new formula to calculate the yuan’s daily reference rate against the U.S.
  • The Bank of Canada, as expected, decided to keep rates unchanged

    Thursday, May 25, 2017 - 08:40 EDT
    The Bank of Canada, as expected, decided to keep rates unchanged yesterday with a generally neutral tone to the statement.  There were comments that the CPI is generally in line with the Bank’s projections, which is temporarily lower due to lower food prices.
  • Moody's downgraded China's sovereign credit rating

    Wednesday, May 24, 2017 - 09:30 EDT
    Last night, Moody’s downgraded China’s sovereign credit rating one notch from Aa3 to A1 noting the increase in leverage and debt burdens will put pressure on state finances.  The rating agency also added that China would be challenged to maintain its current pace of economic growth while also reducing debt.  The Bank of Canada releases its policy statement this morning, and although rates are expected to remain unchanged, investors will see if Governor Poloz adds further rhetoric around U.S.
  • The Trump administration will release its 2018 budget proposal today

    Tuesday, May 23, 2017 - 08:51 EDT
    The Trump administration will release its 2018 budget proposal today.  Proposed budget details were posted on the Health and Human Services Department website titled “Putting America’s Health First”, which was later removed.  If the alleged document is confirmed to be the final draft, the budget will reduce spending for healthcare including Medicaid, education and foreign aid in favour of $200 billion 10-year infrastructure spending and increased money for federal defense and border security.  The budget may also provide outlines of any potential tax reductions.  The Hou
  • Market volatility continues to ease this morning

    Friday, May 19, 2017 - 10:18 EDT
    Market volatility continues to ease this morning, with the VIX index at 13.49 after hitting an intraday high yesterday of 16.  President Trump spoke yesterday evening and answered questions around any contact with Russia and imposing his will to have Comey drop the investigation on Flynn.  Trump distanced himself and noted that he could only c
  • The VIX Index spiked yesterday from 10.65 to 15.59

    Thursday, May 18, 2017 - 08:38 EDT
    The VIX Index spiked yesterday from 10.65 to 15.59, as volatility increased after news surfaced that the Trump administration may have had undisclosed contact with Russia.  There was also speculation that President Trump ordered FBI Director Comey to stop an investigation into Russia’s role in the 2016 election before firing him last week.  As a result, there was a risk off tone and a flight to safety.  Canada 10-year yields were 13bps lower and 10-year Treasury yields were 10bps lower yesterday.  The TSX and S&P500 were also down 1.73% and 1.82%, respectively.
  • Eurozone CPI for April came in at 0.4%

    Wednesday, May 17, 2017 - 08:45 EDT
    Eurozone CPI for April came in at 0.4%, which was in line with expectations, with year over year inflation tracking 1.9%.  Categories such as recreation/culture boosted inflation from the Easter holiday as well as electricity and gas prices related to housing.
  • First quarter GDP for the Eurozone came in as expected at 0.5%

    Tuesday, May 16, 2017 - 08:21 EDT
    First quarter GDP for the Eurozone came in as expected at +0.5%, with year over year GDP tracking at +1.7%.  Although the Eurozone as a whole showed growth, it masks a somewhat uneven growth path across the region.  Spain, for instance, showed growth of +0.8%, while Greece contracted for the second month in a row putting the country back into recession.  The ECB has noted that it plans to begin unwinding stimulus early next year as the European recovery is becoming increasingly solid and broad, but early removal of stimulus could be negative for Greece.  In the U.K., inf

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