Whoopsy! S&P jumped the gun on France:
Standard & Poor’s roiled global equity, bond, currency and commodity markets when it sent and then corrected an erroneous message to subscribers suggesting France’s top credit rating had been downgraded.
The benchmark Stoxx Europe 600 Index extended its decline to 1.5 percent to 234.11 and French 10-year bond yields surged as much as 28 basis points to 3.48 percent, the highest level since July. The euro pared gains and U.S. equities briefly dropped after the mistaken announcement. Commodities erased gains before resuming increases after S&P affirmed France’s AAA rating in a later statement.
…
S&P’s erroneous message was put out at 3:57 p.m. Paris time. The company sent a release at 5:40 p.m. Paris time saying the message was incorrect and affirming France’s rating.
Meanwhile Cameron appears to favour monetization of European debt:
U.K. Prime Minister David Cameron suggested that the European Central Bank should use its resources to underpin the euro-area bailout fund and give it enough capacity to rescue the region’s larger economies.
“If the leaders of the euro zone want to save their currency then they, together with institutions of the euro zone, must act now,” Cameron said in a speech in London today. “The longer the delay, the greater the danger.”
…
Cameron said yesterday Italy’s position is close to being unsustainable, given the rise in bond yields.“If you don’t have credibility about your plans to deal with your debts and deal with your deficits, whether you like the markets or not, they won’t lend you any money,” Cameron told lawmakers. “That’s what we are seeing in countries like Greece and now tragically in Italy, where the price of borrowing money is getting to a totally unsustainable level.”
Greece finally got a new Prime Minister:
Lucas Papademos, named today to be interim prime minister of Greece, steered the country into the euro region as central bank governor more than a decade ago. Now the former European Central Bank vice president will have to secure the country’s euro membership for a second time.
Papademos, who has never held elected office, helped foster economic growth rates that surpassed Germany’s and France’s in his eight years at Greece’s central bank before moving to the ECB in 2002. Most recently a visiting professor at Harvard University in Cambridge, Massachusetts, and an adviser to departing Prime Minister George Papandreou, Papademos takes over a country weeks from being unable to meet its debt obligations.
The OSC has provided a report on Dialogue 2011, referred to as “an important forum to consult with our stakeholders”, held on November 1.
The Toronto Stock Exchange’s DataLinx service is having problems again, so this report has been prepared using prices from Yahoo!
It was an uneventful day in the Canadian preferred share market, with PerpetualDiscounts up 2bp, FixedResets gaining 5bp and DeemedRetractibles down 5bp. Volatility was good. Volume was average.
| 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 | -0.2576 % | 2,122.1 |
| FixedFloater | 4.82 % | 4.53 % | 26,163 | 17.26 | 1 | 0.1524 % | 3,197.3 |
| Floater | 3.39 % | 3.41 % | 159,606 | 18.70 | 2 | -0.2576 % | 2,291.4 |
| OpRet | 4.96 % | 0.94 % | 54,498 | 1.51 | 7 | -0.1646 % | 2,479.2 |
| SplitShare | 5.77 % | 6.60 % | 59,674 | 5.13 | 3 | 0.2953 % | 2,509.0 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1646 % | 2,267.0 |
| Perpetual-Premium | 5.57 % | 2.73 % | 103,756 | 0.15 | 13 | 0.0251 % | 2,156.5 |
| Perpetual-Discount | 5.32 % | 5.21 % | 108,941 | 14.73 | 17 | 0.0218 % | 2,290.8 |
| FixedReset | 5.11 % | 2.96 % | 211,446 | 2.51 | 63 | 0.0542 % | 2,344.9 |
| Deemed-Retractible | 5.04 % | 4.36 % | 205,970 | 3.46 | 46 | -0.0497 % | 2,216.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.E | FixedReset | -1.33 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-19 Maturity Price : 25.00 Evaluated at bid price : 25.96 Bid-YTW : 4.49 % |
| MFC.PR.C | Deemed-Retractible | -1.25 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.25 Bid-YTW : 6.67 % |
| GWO.PR.G | Deemed-Retractible | -1.21 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.55 Bid-YTW : 5.54 % |
| BNS.PR.L | Deemed-Retractible | -1.21 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2015-04-28 Maturity Price : 25.25 Evaluated at bid price : 25.39 Bid-YTW : 4.34 % |
| MFC.PR.B | Deemed-Retractible | -1.16 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.07 Bid-YTW : 6.35 % |
| CM.PR.P | Deemed-Retractible | 1.01 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2012-10-29 Maturity Price : 25.00 Evaluated at bid price : 25.88 Bid-YTW : 1.97 % |
| BAM.PR.N | Perpetual-Discount | 1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-10 Maturity Price : 22.98 Evaluated at bid price : 23.41 Bid-YTW : 5.12 % |
| GWO.PR.N | FixedReset | 1.38 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.90 Bid-YTW : 3.22 % |
| HSB.PR.C | Deemed-Retractible | 1.99 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-30 Maturity Price : 25.25 Evaluated at bid price : 25.65 Bid-YTW : 4.43 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| SLF.PR.I | FixedReset | 398,680 | New issue settled today. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-12-31 Maturity Price : 25.00 Evaluated at bid price : 24.55 Bid-YTW : 4.41 % |
| CM.PR.E | Perpetual-Discount | 160,844 | Nesbitt crossed 100,000 at 25.00; Scotia crossed 25,000 at 24.99. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2041-11-10 Maturity Price : 24.69 Evaluated at bid price : 24.99 Bid-YTW : 5.64 % |
| CM.PR.D | Perpetual-Premium | 109,636 | Scotia crossed blocks of 25,000 and 19,000, both at 25.32. RBC crossed 49,900 at 25.33. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-04-30 Maturity Price : 25.00 Evaluated at bid price : 25.33 Bid-YTW : 3.21 % |
| BNS.PR.Z | FixedReset | 73,802 | Recent secondary offering. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.99 Bid-YTW : 3.18 % |
| TD.PR.K | FixedReset | 59,039 | Scotia crossed blocks of 30,00 and 26,500, both at 27.40. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 27.44 Bid-YTW : 2.60 % |
| TD.PR.E | FixedReset | 54,828 | RBC crossed blocks of 24,900 and 25,000, both at 27.30. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 27.30 Bid-YTW : 2.46 % |
| There were 32 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BAM.PR.M | Perpetual-Discount | Quote: 23.02 – 23.45 Spot Rate : 0.4300 Average : 0.3218 YTW SCENARIO |
| BAM.PR.G | FixedFloater | Quote: 19.71 – 19.99 Spot Rate : 0.2800 Average : 0.1992 YTW SCENARIO |
| RY.PR.F | Deemed-Retractible | Quote: 25.11 – 25.50 Spot Rate : 0.3900 Average : 0.3119 YTW SCENARIO |
| HSE.PR.A | FixedReset | Quote: 25.75 – 26.05 Spot Rate : 0.3000 Average : 0.2238 YTW SCENARIO |
| CM.PR.M | FixedReset | Quote: 27.36 – 27.82 Spot Rate : 0.4600 Average : 0.3845 YTW SCENARIO |
| GWO.PR.I | Deemed-Retractible | Quote: 22.56 – 22.87 Spot Rate : 0.3100 Average : 0.2536 YTW SCENARIO |