Daily Market Commentary


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 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
  • WTI crude prices are up over 3% this morning

    Monday, May 15, 2017 - 09:08 EDT
    WTI crude prices are up over 3% this morning after both Saudi Arabia and Russia said that they were both in favour of extending the oil output cuts until the first quarter of 2018.  The ultimate goal is to reduce global inventories to the five year average.  This proposal will be presented ahead of a meeting between OPEC and other nations later this month.
  • U.S. retail sales for April increased by 0.4%

    Friday, May 12, 2017 - 09:35 EDT
    U.S. retail sales for April increased by 0.4% against expectations of +0.6%, although last month’s number was revised higher to +0.1% from -0.2%.  Purchases of autos increased by 0.7% while electronics and appliance sales increased 1.3% in the month.  Retail sales ex. auto and gas rose by 0.3% m/m.  U.S.
  • New York President Dudley spoke this morning

    Thursday, May 11, 2017 - 09:36 EDT
    New York Fed President Dudley spoke this morning stating that the Fed will most likely start to shrink its balance sheet later this year or next.  He noted that the U.S.
  • Oil prices are higher this morning

    Wednesday, May 10, 2017 - 09:31 EDT
    Oil prices are higher this morning at $46.32/barrel as industry reports show that U.S.
  • Today is election day in BC

    Tuesday, May 9, 2017 - 09:08 EDT
    Today is election day in BC with many energy and pipeline investors closely watching the developments between the Liberals and NDP party.  Polls show that it will be a close race with 39% and 40% of votes going to each party, respectively.  With the recent surge in support for the BC Green Party, it is yet to be seen if this will shift votes away from the NDP party.  The U.S.
  • European equity markets are weaker this morning

    Monday, May 8, 2017 - 08:54 EDT
    Emmanuel Macron won the French presidential election on Sunday, beating far right candidate Le Pen.  Macron won 66% of votes, with his primary platform to strengthen free market policies and improve ties with the European Union.  However, equity markets in Europe are weaker this morning as potential OPEC cuts will not be extended and continue to put pressure on crude prices.  In China, the trade surplus increased from $23bil to $38bil in April.  Details for China’s trade were softer, as exports slowed to +8% y/y and imports rose +11.9%.  China’s foreign reserves con
  • WTI crude prices continue to be weaker this morning

    Friday, May 5, 2017 - 09:24 EDT
    Canadian employment grew by 3.2k in April, which was below expectations of +10k.  Although below expectations, Canadian employment is still averaging approximately 21k new jobs per month this year.  Details in the employment numbers were a tad softer as Canada lost 31.2k full time jobs and gained 34.3k part time jobs.  The participation rate decreased by 0.3% to 65.6% leading to a drop in the unemployment rate to 6.5%.  U.S.
  • The FOMC left the Fed funds traget rate unchanged

    Thursday, May 4, 2017 - 11:37 EDT
    The FOMC left the Fed funds target rate unchanged yesterday at 0.75-1%.  A statement did acknowledge that growth in the first quarter had slowed, but most of those factors are likely to be transitory.  However, the fundamentals underpinning the continued growth remains solid.  The Fed also recognized that core inflation has been running below 2% but reiterated that future policy tightening should continue to be gradual.  Their reinvestment policy was also left unchanged and will continue until normalization of the Fed funds rate is well underway.
  • The FOMC will release its policy announcement later this afternoon

    Wednesday, May 3, 2017 - 12:25 EDT
    The FOMC will release its policy announcement later this afternoon, although expectations are for rates to remain unchanged.  The tone of the statement, as well as changes to reframe guidance for additional rate increases this year, will be important.  Additionally, investors will see if the Fed provides further details on reducing their balance sheet and rhetoric on the recent softness in economic data.
  • Today is the start of the two day FOMC meetings before tomorrow's announcement

    Tuesday, May 2, 2017 - 08:57 EDT
    Today is the start of the two day FOMC meetings before tomorrow’s announcement.  With the most recent softness in data, including last Friday’s Q1 GDP number, it is expected that the Fed will hold rates unchanged this meeting.  Markets are pricing in only a 14% chance that there will be a rate hike this meeting, with a 59% chance for a hike in June.  U.S.
  • A tentative $1.1 trillion bill is agreed to keep the U.S. government open

    Monday, May 1, 2017 - 10:22 EDT
    Last night, the U.S. house and senate reached a tentative agreement on a $1.1 trillion bill to keep the government open until the end of September.  With a bipartisan agreement, markets are hoping that negotiations will not stall where there would be chances of a government shutdown.  Personal incomes in the U.S.
  • Canadian GDP for February came in flat

    Friday, April 28, 2017 - 09:43 EDT
    Canadian GDP for February came in flat, just below expectations of +0.1%, with year over year growth tracking at 2.5%.  The Canadian economy stalled in the month as manufacturing and production in the goods sectors shrank, offset by real estate sector gains primarily in the Toronto market.  First quarter U.S.
  • President Trump yesterday announced changes to corporate taxes

    Thursday, April 27, 2017 - 09:11 EDT
    President Trump yesterday announced changes to corporate taxes by cutting the current rate of 35% to 15%.  It is yet to be seen whether the new policy change will be revenue neutral, as Treasury Secretary Mnuchin expects economic growth from the tax cuts to offset the loss in tax revenues.  The Trump administration also proposed a one-time repatriation tax of 10% that would allow U.S. companies to transfer more than $2.6 trillion of earnings that are currently offshore.  This one time repatriation would be an additional source of revenue to offset the tax cuts.
  • Canadian retail sales were weaker than expected

    Wednesday, April 26, 2017 - 10:00 EDT
    Canadian retail sales were weaker than expected, with February data reporting a decrease of 0.6% versus a flat reading expected.  The prior month’s strong reading was increased 0.1% to 2.3%.  Sales related to motor vehicles, and purchases at gas stations, fell the most in the month, as Auto and auto parts sales declined for the first time in seven months.  Ex-autos, there was broad based weakness across sectors as sales volumes declined 0.1%.  This morning’s weak retail sales numbers could further decrease expectations for February GDP, with current expectations of a 0.1
  • U.S. President Trump yesterday imposed a 20% tax on softwood lumber

    Tuesday, April 25, 2017 - 08:35 EDT
    U.S. President Trump yesterday imposed a 20% tax on softwood lumber for all softwood coming into the U.S. from Canada.  This is the first political action from President Trump that substantially affects trade between the two countries and potentially escalates Trump’s protectionist stance.  This follows statements late last week that U.S.
  • Equity markets in Europe are rallying

    Monday, April 24, 2017 - 10:14 EDT
    Equity markets in Europe are rallying after the centrist Emmanuel Macron and nationalist Le Pen garnered the largest number of votes in the first round of the French presidential election.  The France CAC 40 is up 4.5% with other periphery equity markets up around 3%, as investors are betting on the relief rally that pro-growth Macron can win the second round to become the next French president.  French 10-year yields are also 8bps higher as a result.  The second round of elections will take place on May 7, with polls indicating Macron would win 62% of votes.
  • Canadian CPI for March came in lower than expected

    Friday, April 21, 2017 - 09:34 EDT
    Canadian CPI for March came in lower than expected at 1.6% y/y, instead of consensus of 1.8%.  Inflation declined in the month from decreases in food and clothing prices.  This is the third straight month of food price declines as gasoline prices also moderated.  The most recent BOC announcement noted that inflation has been drifting downwards and slow wage growth is contributing to excess capacity in the economy.
  • Equity markets are mixed this morning

    Thursday, April 20, 2017 - 09:21 EDT
    Equity markets in Europe are mixed this morning, as there is uncertainty for investors surrounding the French election.
  • All three levels of government met yesterday to discuss Toronto's housing market

    Wednesday, April 19, 2017 - 09:04 EDT
    After all three levels of government met yesterday to discuss Toronto’s housing market, they have agreed in the short-term to refrain from introducing new measures for buyers.  Finance Minister Morneau noted that any additional measures in the near term would only stoke consumer demand and increase prices.  However, Ontario is set to announce ten different measures in the upcoming provincial budget to address housing affordability.  Speculation of new rules range anywhere from tax on foreign buyers, vacancy taxes, and potentially rent control.
  • U.K. Prime Minister announced a snap election this morning

    Tuesday, April 18, 2017 - 09:06 EDT
    U.K. Prime Minister Theresa May announced this morning that she would seek a snap U.K. election on June 8 in order to strengthen her ability to negotiate Brexit.  An election in the U.K.
  • Ten year U.S. Treasury yields are at a five month low at 2.21%

    Monday, April 17, 2017 - 09:17 EDT
    The U.S. reported both retail sales and CPI on Friday, with indications that Q1 GDP may come in lower than initially expected.  Retail sales declined for two straight months, with March figures falling by 0.2% and last month’s reading revised lower from +0.1% to -0.3%.  Purchases of autos declined by 1.2% in March, as industry data showed the slowest pace of car and truck sales in the past two years.  Excluding autos, retails sales came in flat for the month.  Meanwhile, U.S.
  • BoC's growth projections for 2017 were revised higher

    Thursday, April 13, 2017 - 09:16 EDT
    As expected, the Bank of Canada left rates unchanged yesterday.  Although the statement was much more balanced and acknowledged the most recent improvement in economic data, the Bank believes that “there is still considerable uncertainty about the outlook” and that business investment continues to be a drag on growth.  Otherwise the statement was more optimistic, noting the temporary boost from the oil and gas sector, along with residential investment and consumer spending.  Growth projections were also revised higher for 2017, up to 2.6% from 2.1%, however 2018 growth was re
  • BOC is expected to keep the overnight rate unchanged

    Wednesday, April 12, 2017 - 10:58 EDT
    The Bank of Canada will release its monetary policy statement this morning at 10am and is expected to keep the overnight rate unchanged at 0.5%.  The last statement held some dovish posturing that noted the Canadian economy still had excess capacity and competitive challenges for exporters.  The Monetary Policy Report, that will be released along with the statement this morning, has the potential for growth outlook revisions after stronger economic data at the start the year.  However, investors will be looking at whether there will be the removal of the dovish tone inherent
  • There continues to be a bid for safe haven assets

    Tuesday, April 11, 2017 - 09:08 EDT
    Fed Chair Janet Yellen spoke yesterday and stated that the Fed has shifted focus to sustaining growth on an even keel instead of stimulating the economy.  She believed that the economy was “pretty healthy” from the central bank’s long running stimulus, that should now be coming to an end.  Although previously noted that the Fed would begin to reduce its large balance sheet by the end of the year, no further details were provided during yesterday’s speech.  She did comment that most Fed officials regard the lower unemployment rate as sustainable, although the economy still fac
  • More hawkish comments sent 10 year Treasury rates higher on Friday

    Monday, April 10, 2017 - 09:07 EDT
    Fed vice-chairman Dudley spoke following Friday’s weak U.S.
  • Canadian employment added 19.4k jobs, surpassing expectations

    Friday, April 7, 2017 - 09:01 EDT
    U.S. non-farm payrolls came in much lower than expectations at 98k, against an expected 180k increase.  Two month revisions were also lower by -38k.  The lower than expected number is being blamed on weather related issues where 10-20 inches of snow was dropped on the Northeast.  The U.S.
  • Chinese President Xi Jinping's two day visit with President Trump starts today

    Thursday, April 6, 2017 - 09:08 EDT
    Chinese President Xi Jinping’s two day visit with President Trump starts today.  During President Trump’s campaign, he blamed China for taking millions of U.S. jobs and enabling North Korea’s move toward obtaining nuclear weapons.  Last week, Trump noted that these talks would be difficult due to all the manufacturing jobs lost to China as well as the growing trade deficit between the two countries.
  • U.S. ADP employment for March increased by 263k

    Wednesday, April 5, 2017 - 09:00 EDT
    U.S. ADP employment for March increased by 263k, which was above expectations of a 185k increase.  Last month’s figure was revised lower by 53k to 245k.  Although last month’s large ADP increase matched the surge in non-farm payrolls, historically ADP employment has not been the most accurate predictor.  U.S.
  • Canadian trade balance posted a deficit

    Tuesday, April 4, 2017 - 09:26 EDT
    Canadian trade balance posted a deficit of $927mil against expectations of a $600mil surplus for February.  Last month’s trade balance was also revised lower from $807mil to $421mil.  Export volumes in February fell by 2.5%, generally related to declines in agriculture related to canola, while energy exports also fell by 2.6% for the month.  The U.S.
  • Oil prices continue to march higher

    Monday, April 3, 2017 - 10:23 EDT
    Oil prices continue to march higher this morning, with prices holding steady above $50/barrel.  Globally, crude stockpiles continue to show signs of decline after OPEC nations agreed to cut production.  Many of the OPEC members support extending production cuts past the current agreement that expires in June.  U.S. refineries are also showing increased crude usage helping to reduce the global crude supply.
  • The Canadian economy continued to show growth to start the year...

    Friday, March 31, 2017 - 09:59 EDT
    The Canadian economy continued to show growth to start the year, with January posting an increase in GDP of 0.6% against consensus of +0.3%.  Canadian manufacturing and oil producers boosted growth, as the manufacturing sector grew at the fastest pace in 15 years.  The rebound in commodities and oil has also been positive for the economy.  Year over year GDP in Canada now stands at 2.3%.  In the U.S., personal spending increased 0.1% against expectations of +0.2%.  Consumer spending rose less than expected, even as personal incomes grew at expectations of +0.4% for
  • The third and final reading of U.S. Q4 GDP improved to 2.1%...

    Thursday, March 30, 2017 - 10:16 EDT
    The third and final reading of U.S.
  • Today marks the official day that the U.K. has submitted its letter to the European Union...

    Wednesday, March 29, 2017 - 10:18 EDT
    Today marks the official day that the U.K.
  • President Trump failed to garner sufficient support to pass healthcare reform...

    Monday, March 27, 2017 - 09:55 EDT
    President Trump failed to garner sufficient support to pass healthcare reform legislation in Congress last Friday.  As a result, S&P500 futures are pointing towards a lower open, while 10-year Treasury yields are 0.05% lower at 2.36%.  Markets are reacting to the setback, as it casts doubts on whether the Republican Party can easily pass other legislation such as tax reform and infrastructure spending.  The President, and House Speaker Ryan noted that they will now turn their attention to other priorities including immigration, deregulation and tax reform.
  • Canadian inflation in February increased 0.2% m/m

    Friday, March 24, 2017 - 09:25 EDT
    The U.S. government continues to debate reforms to the healthcare bill, as the vote was delayed yesterday.  However, President Trump and House Speaker Ryan are set on forcing through a vote today.  At this point, it is uncertain whether Republicans have enough votes to pass the bill, adding to further speculation that President Trump can garner enough support to change other legislation.   Overall, markets have held up even with the delay in the healthcare vote, with U.S.
  • Canadian deficit expected to increase to $28 billion

    Thursday, March 23, 2017 - 09:09 EDT
    The Canadian Federal Budget was announced yesterday that will see the 2017/18 deficit increase to $28 billion, an increase from a $23 billion deficit last year.  The Liberal government rationalized that the increase in the deficit would not affect the debt-to-GDP ratio, which is expected to stay relatively unchanged at 31.6%.  The budget forecast will see the deficit remain at $27.4 billion next year and falling in 2019/20 to $23.4 billion.  Major policy announcements include infrastructure spending at $645 million this year, pushing out major infrastructure spending of $4 bi
  • The Canadian federal budget will be released this afternoon

    Wednesday, March 22, 2017 - 08:49 EDT
    The Canadian federal budget will be released this afternoon, with the press reporting yesterday that a potential capital gains tax will not be included in this budget release.  Investors will wait and see if that is the case as well as further clarity on timing for bank bail-in bonds.  In addition, further details surrounding stimulus fiscal policy measures around the Canadian Infrastructure Bank are expected to be announced.
  • Canadian retail sales surged in January

    Tuesday, March 21, 2017 - 09:00 EDT
    Canadian retail sales surged in January at an increase of 2.2% against expectations of +1.5%, rising the most since March 2010.  New car dealer sales were the largest contributor to the monthly gain.  However, there were broad based gains as retail sales ex autos also increased +1.7% for the month. 
  • Oil prices are weaker this morning

    Monday, March 20, 2017 - 08:53 EDT
    Oil prices are weaker this morning, down 1.5%, as data released on Friday showed that the U.S. rig count increased by 14.  As a result, equity markets in Europe are down approximately 0.25% to start the morning. 
  • Canadian manufacturing sales rose 0.6% in January

    Friday, March 17, 2017 - 08:58 EDT
    Canadian manufacturing sales rose 0.6% in January beating expectations of a 0.3% decrease.  Manufacturing sales volumes also rose 0.7% while new orders climbed 4.6% for the month.  The largest contribution in January was a 0.71% increase in the petroleum and coal category offset by a decrease of 0.59% in transportation equipment.
  • As expected, the Fed raised rates by 25bps yesterday

    Thursday, March 16, 2017 - 09:02 EDT
    As expected, the Fed raised rates by 25bps yesterday, although the statement and press conference held a dovish tilt around inflation expectations.  The statement noted that business investment and inflation was stronger, although core inflation still remained below the 2% level.  One Fed member, Minneapolis President Kashkari, did dissent in favour of leaving rates unchanged this meeting, arguing that the labour market had more room to run.  GDP growth in 2018 was upgraded 0.1% to 2.1% with the expectation of longer-run unemployment to decrease by 0.1% to 4.7%.  Based o
  • We expect to see the Fed raise rates by 25bps

    Wednesday, March 15, 2017 - 09:06 EDT
    The FOMC statement at 2pm is expected to see the Fed raise rates by 25bps, which will be followed by Janet Yellen’s press conference.  With stronger economic data recently including better employment, retail sales and higher inflation, investors will focus on the dot plot charts to see whether the Fed will look for four rates hikes instead of the currently projected three.  WTI Crude prices are back above $48/barrel this morning after industry reports showed that U.S.
  • WTI Crude continues to show weakness

    Tuesday, March 14, 2017 - 09:07 EDT
    The British parliament has approved Prime Minister May’s bill to trigger Article 50 of Brexit, and timing is now fully up to the Prime Minister.  As a result, the Pound continues to show weakness this morning, falling to a two month low.  WTI Crude continues to show weakness as it has fallen below $48/barrel.  Saudi Arabia has told OPEC that it has raised output to above 10 million barrels a day in February.  This reverses about one third of the supply cuts it made back in January.  Although there was an increase of supply in February, the data still shows that Saud