The Bank of Canada has released the April 2011 Monetary Policy Report:
The Bank expects core inflation to rise gradually to 2 per cent as excess supply in the economy is slowly absorbed and inflation expectations remain well anchored (Table 3 and Chart 32). As in January, this increase reflects the unwinding of the transitory influences currently dampening core inflation, including the effects of HST-related tax refunds passed on by businesses. The combination of ongoing modest growth in labour compensation and higher productivity is expected to continue to dampen inflationary pressures, with the higher assumed value of the Canadian dollar providing further restraint.
Although core inflation has been slightly weaker than expected in recent months, it is projected to converge to 2 per cent somewhat more quickly than in the January Report. This reflects the slightly smaller degree of slack in the Canadian economy over the projection horizon, as well as the sharp increases in the prices of agricultural commodities observed in recent months, which are expected to lead to a somewhat larger increase in food prices than had been expected.
DBRS has published its Quarterly SplitShare Market Report:
DBRS has today published its quarterly surveillance report covering the Canadian split share market for Q1 2011. The report provides insight into recent market activity and summarizes the performance of split share funds rated by DBRS. Three main areas are covered in the report: equity performance, existing fund activity and new fund market activity. The appendix provides details on all of the preferred shares and securities rated by DBRS, including current ratings and recent downside protection levels.
A copy of this commentary is available by contacting us at info@dbrs.com
The TMX / LSE deal looks more likely:
The architects of a deal between TMX Group Inc. (X-T39.68-0.16-0.40%) and the London Stock Exchange Group PLC have cleared a major hurdle by winning the backing of an all-party committee of MPPs at the Ontario legislature.
The committee does not have the power to approve or reject the contentious, multi-billion-dollar transaction. However, the committee is throwing its support behind the deal, according to Queen’s Park sources close to the situation, adding a powerful voice in a proposed merger that has been intensely debated in the business community.
Alpha ATS has had its IntraSpread dark orders approved:
Alpha’s IntraSpread will create a third market place, catering only to ‘dark orders’ that hide trade prices and quantities. So if RBC has a big order and doesn’t want anyone to know how much it’s trying to sell, it can enter a dark order. At the moment TMX allows sellers to do the same, but they have to be executed in the ‘lit’ or public market place.
In Alpha’s case, the buying order is completely dark as well. That scares some people. But what got it past the OSC this go around, is that only retail buyers can scoop these dark orders up. Alpha argues that means small orders will finally take priority over the big institutional buyers that have to stay in the other two market places.
Some emerging markets want more control over the World Bank & IMF:
The management structure of the institutions needs to reflect changes in the world economy, the draft statement by Brazil, Russia, India, China and South Africa says, according to the diplomats, who asked not to be identified because the final text isn’t public. The section calls for a bigger role for developing countries in global institutions, a reference to concerns with how leaders are chosen at the World Bank and IMF.
For the life of me, I don’t understand why this needs to be discussed. You want more influence? Pony up more money. You’ve ponied up the money but still don’t have influence? Open your own store. Why is this complicated?
Is anybody else having trouble on the internet lately? When I open the Globe & Bloomberg pages linked above, for instance, my system basically freezes … I think my (IE) browser is executing about 40-bazillion JavaScript applets. How can I test this? I don’t look at dealbreaker.com any more, because by the time a page finally loads, I’ve read the story in the next day’s newspaper.
According to Load Impact, the G&M page has 59 resources and takes 15.06 seconds to load. PrefBlog takes 5.94 seconds with 86 resources (mostly the little green boxes on the right-hand panel). I don’t believe the results, though, because I just checked again and AFTER FIVE MINUTES (literally!) the G&M page is still chewing up all the capacity of one of my dual-processors and is still indicating it’s getting resources.
Update:: I’ve turned off “Compatibility View” for Bloomberg & G&M; things are much better now.
It was a quiet day with a downish bent in the Canadian preferred share market, with PerpetualDiscounts down 7bp, FixedResets off 3bp and DeemedRetractibles gaining 2bp. Practically no volatility, only one entry in the Performance Highlights table. Volume was average.
PerpetualDiscounts now yield 5.60%, equivalent to 7.28% interest at the standard equivalency factor of 1.3x. Long Corporates yield about 5.6% (maybe a little more) so the pre-tax interest equivalent spread (also called the Seniority Spread) is now about 170bp, a reversal of the sharp tightening reported on April 6.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0238 % | 2,408.9 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0238 % | 3,623.0 |
| Floater | 2.50 % | 2.27 % | 40,995 | 21.56 | 4 | 0.0238 % | 2,601.0 |
| OpRet | 4.92 % | 3.43 % | 56,034 | 2.09 | 8 | 0.0917 % | 2,411.7 |
| SplitShare | 5.21 % | -1.65 % | 109,243 | 0.66 | 6 | -0.0583 % | 2,490.6 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0917 % | 2,205.3 |
| Perpetual-Premium | 5.80 % | 5.60 % | 123,928 | 6.15 | 8 | -0.0398 % | 2,049.3 |
| Perpetual-Discount | 5.59 % | 5.60 % | 131,597 | 14.40 | 16 | -0.0746 % | 2,118.8 |
| FixedReset | 5.17 % | 3.47 % | 205,525 | 2.94 | 57 | -0.0312 % | 2,291.2 |
| Deemed-Retractible | 5.26 % | 5.19 % | 313,397 | 8.18 | 53 | 0.0212 % | 2,081.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| ELF.PR.G | Deemed-Retractible | -1.38 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.04 Bid-YTW : 7.50 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.Q | FixedReset | 104,448 | TD crossed 35,000 at 24.90; Nesbitt bought 20,000 from anonymous at the same price; anonymous crossed (?) 10,600 at the same price again; Desjardins crossed 10,000, again at 24.90. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.93 Bid-YTW : 4.00 % |
| RY.PR.A | Deemed-Retractible | 65,524 | RBC crossed 30,000 at 23.87; Nesbitt crossed 20,000 at 23.95. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.90 Bid-YTW : 5.09 % |
| BMO.PR.K | Deemed-Retractible | 55,963 | Desjardins crossed two blocks of 25,000 each, both at 25.20. YTW SCENARIO Maturity Type : Call Maturity Date : 2016-12-25 Maturity Price : 25.00 Evaluated at bid price : 25.17 Bid-YTW : 5.29 % |
| GWO.PR.N | FixedReset | 55,593 | Nesbitt crossed 50,000 at 24.50. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.50 Bid-YTW : 4.14 % |
| TD.PR.O | Deemed-Retractible | 51,348 | Scotia crossed 20,000 at 24.60. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.53 Bid-YTW : 5.08 % |
| RY.PR.B | Deemed-Retractible | 41,432 | Nesbitt crossed 24,000 at 24.49. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.40 Bid-YTW : 5.10 % |
| There were 32 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| IAG.PR.E | Deemed-Retractible | Quote: 25.42 – 25.90 Spot Rate : 0.4800 Average : 0.2891 YTW SCENARIO |
| IAG.PR.A | Deemed-Retractible | Quote: 22.10 – 22.54 Spot Rate : 0.4400 Average : 0.2655 YTW SCENARIO |
| GWO.PR.M | Deemed-Retractible | Quote: 25.21 – 25.63 Spot Rate : 0.4200 Average : 0.2589 YTW SCENARIO |
| TD.PR.K | FixedReset | Quote: 27.21 – 27.58 Spot Rate : 0.3700 Average : 0.2343 YTW SCENARIO |
| RY.PR.N | FixedReset | Quote: 27.17 – 27.63 Spot Rate : 0.4600 Average : 0.3342 YTW SCENARIO |
| CIU.PR.A | Perpetual-Discount | Quote: 22.57 – 22.99 Spot Rate : 0.4200 Average : 0.3257 YTW SCENARIO |
[…] PerpetualDiscounts now yield 5.58%, equivalent to 7.25% interest at the standard equivalency factor of 1.3x. Long Corporates now yield about 5.5%, so the pre-tax interest-equivalent spread (also called the Seniority Spread) is now about 175bp, a slight (and perhaps spurious) increase from the 170bp reported April 13. […]