PrefBlog

The Europeans are backing away from austerity:

European finance ministers opened the way for looser budget policies after a backlash against austerity thrust Italy into political limbo and shattered months of relative stability in European markets.

Italy’s deadlocked election, France’s refusal to make deeper budget cuts and protests against the shrinking of the welfare state across southern Europe escalated the rebellion against the German-led prescription for fighting the debt crisis.

Economic strains “may also justify in a certain number of cases reviewing deadlines for the correction of excessive deficits,” European Union Economic and Monetary Commissioner Olli Rehn told reporters late yesterday after a meeting of euro-area finance ministers in Brussels.

Meanwhile, there is chatter that loose money is required in Canada:

Hedge funds are amassing record bets against the Canadian dollar on speculation the Bank of Canada will drop its bias toward raising interest rates, putting it in unison with the rest of the Group of Seven nations.

Futures contracts wagering on a decline in the Canadian dollar versus its U.S. counterpart held by so-called leveraged funds totaled C$6.3 billion ($6.1 billion) in the week ended Feb. 26, according to Citigroup Inc., citing U.S. Commodity Futures Trading Commission figures. Overall, the data showed traders reversed bets on a rise in the Canadian currency during the five-day period for the first time in eight months.

Weak exports and record debts are eroding growth in the world’s 11th-largest economy, with the slowest expansion forecast this year since 2009. Bank of Canada Governor Mark Carney remains the lone central-bank head in the G-7 suggesting a rate increase. BlackRock Inc. and State Street Canada are among the fixed-income managers speculating that Carney may drop his tightening bias when the central bank meets tomorrow, making Canadian-dollar denominated assets less attractive to international investors.

Loose money is government policy – why, look at the 12Q1 Scotia Investor Presentation! 58% of their $188-billion mortgage portfolio is government insured. Thank you, Federal Junior Republicans!

One of the words that can generally be relied upon to turn brains into much is “privacy” (another is “kiddie-porn”). It was nice to see the word being used to eliminate a little stupid red tape:

Ontario’s privacy commissioner has ordered the LCBO to stop collecting personal information from people who buy alcohol through wine clubs.

Ann Cavoukian’s decision came after a wine club complained that the Liquor Control Board of Ontario required it to provide the names, addresses, phone numbers and selections of everyone taking part in bulk orders.
…
“The LCBO has not provided my office with much more than anecdotal or hypothetical evidence to support its position that the illegal resale of liquor by wine clubs in this province is so problematic that it necessitates the collection of the personal information of club members who purchase wine through their clubs,” she wrote last week.

Scotia’s 12Q1 Quarterly Press Release did not contain a statement of intent to redeem BNS.PR.P, a FixedReset, 5.00%+205 that will reset 2013-4-30 at a yield currently forecast to be 3.25% if not called. Make of that what you will.

It was a very uneven day for the Canadian preferred share market, with PerpetualPremiums gaining 1bp, FixedResets winning 29bp and DeemedRetractibles up 10bp. Lots of volatility, comprised almost entirely of FixedReset winners. Volume was extremely high, helped along by the CU 4.50% Straight new issue and the CPX 4.50%+315 FixedReset new issue – and, doubtless, continued shuffling after the closing of TRP.PR.D yesterday.

This entry was posted on Wednesday, March 6th, 2013 at 1:36 am and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.