Global bonds took a hit today, sending yields up again:
Bond yields climbed and a gauge of world stock markets recovered from previous lows to trade flat on Tuesday, as uncertainty grew over the mix of stimulus the European Central Bank will add to boost a slumping economy this week amid fresh signs global growth was slowing.
Germany’s 30-year benchmark bond yield briefly broke into positive territory for the first time since Aug. 5, while U.S. Treasury yields climbed to three-week highs.
Benchmark U.S. 10-year notes last fell 1 point in price to yield 1.7333%, from 1.622% late on Monday.
The Canadian dollar strengthened to a near six-week high against the U.S. dollar on Tuesday, supported by improvement in risk appetite and a less dovish Bank of Canada policy announcement last week than some investors had expected.
The Bank of Canada held interest rates steady last Wednesday and made no mention of future cuts despite easing this year by some of its global peers, including the U.S. Federal Reserve.
Chances of a rate cut at the central bank’s next meeting on Oct. 30 have slumped to about 15% from nearly 70% before last week’s rate decision, money market data showed.
…
Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries and German Bunds. The 10-year yield touched its highest intraday level since Aug. 1 at 1.435%.
The GOC-5 yield closed at 1.44%, up 6bp.
I see that China has a problem with pork prices:
Things that keep China’s top leaders up at night: a stalling economy, a bruising trade war and, increasingly, pigs.
Specifically, a shortage of pigs, which is fast becoming a national crisis.
The price of pork has been rising for months, and it is now nearly 50 percent higher than it was a year ago, data published on Tuesday showed. Consumers are frustrated, and officials are quietly expressing alarm as they fight the outbreak of a disease that is devastating the country’s pig population and causing the shortage.
…
As officials brace for steeper price increases — analysts are estimating that pork prices could end the year at double their level from 2018 — the challenge for Beijing is becoming more serious.
I know where they can get some:
China has suspended pork imports from two Canadian companies, according to an interview with Canada’s agricultural minister and a Chinese customs document, marking the latest irritant in a widening diplomatic dispute.
As world trade becomes more globalized and countries become more interdependent, it’s going to get harder for nations to exert pressure on each other, whether for noble reasons I support or otherwise. If interfering with trade causes an equal and opposite reaction in the sanctioning country – and its allies – that directly affects consumers, we’re going to see a lot fewer sanctions.
Asset-Liability matching is something that is glossed over by many pension funds. I’m pleased to see this insouciance attacked in the Globe:
A company’s employees lend the DB Pension Division money in the form of deferred wages. In return, the company promises to provide a pension to those employees when they retire. Until then, the DB Pension Division invests this money with the goal of being able to pay these promised pensions.
However, many DB Pension Divisions are investing this money in a way that’s mismatched from the bond-like promises they made to employees. They make bets on equity markets and interest rates in the hopes of generating excess returns that will make it cheaper to pay these promised pensions.
Imagine – what do you think would happen if you went to your CFO and told her that you had a great idea for a new business. You want to borrow money and invest it in the equity markets to generate excess returns for shareholders. I suspect you’d find that it would be a pretty short and career-limiting conversation!
So why would this idea work for a DB pension plan? What’s clear is that for the past 20 years, it has not.
HOOPP does this right; I harp on this issue every so often, most recently on July 25, 2017.
I enjoyed a Globe feature about GFL; primarily the bits about the gross inefficiency of municipal operations:
He knew GFL could get its trucks rolling faster, and do the job with fewer vehicles, than the city did. He recalls watching slack-jawed as two long lines of trucks, each 40 vehicles deep, formed to fuel up, since city crews only worked during the daytime. As a result, the last trucks didn’t even leave the lot until after 9 a.m. Likewise, maintenance crews clocked out at 5 p.m., he says, which meant all upkeep and repairs had to be done during the day, requiring the city to keep backup trucks on standby. GFL, on the other hand, carried out all maintenance and refuelling overnight. The upshot was that the city had 110 trucks to do the job, while Dovigi’s analysis revealed GFL could do it with 85.
| 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 | 1.4909 % | 1,940.8 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 1.4909 % | 3,561.2 |
| Floater | 6.15 % | 6.34 % | 53,396 | 13.29 | 4 | 1.4909 % | 2,052.3 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0169 % | 3,380.3 |
| SplitShare | 4.66 % | 4.51 % | 63,754 | 4.04 | 7 | -0.0169 % | 4,036.8 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0169 % | 3,149.7 |
| Perpetual-Premium | 5.61 % | -17.07 % | 62,533 | 0.09 | 6 | 0.0717 % | 2,981.8 |
| Perpetual-Discount | 5.47 % | 5.64 % | 65,074 | 14.39 | 28 | 0.1122 % | 3,127.4 |
| FixedReset Disc | 5.52 % | 5.41 % | 171,297 | 14.59 | 73 | 0.6016 % | 2,075.0 |
| Deemed-Retractible | 5.29 % | 6.03 % | 77,895 | 7.90 | 27 | 0.0528 % | 3,111.0 |
| FloatingReset | 4.49 % | 6.63 % | 61,017 | 8.04 | 3 | 0.2763 % | 2,350.3 |
| FixedReset Prem | 5.25 % | 3.97 % | 133,548 | 1.62 | 14 | 0.0614 % | 2,580.0 |
| FixedReset Bank Non | 1.98 % | 4.20 % | 90,753 | 2.31 | 3 | -0.3740 % | 2,660.3 |
| FixedReset Ins Non | 5.45 % | 7.87 % | 102,777 | 7.95 | 21 | 0.9139 % | 2,113.0 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BNS.PR.Y | FixedReset Bank Non | -1.10 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.28 Bid-YTW : 3.64 % |
| BMO.PR.E | FixedReset Disc | 1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 20.41 Evaluated at bid price : 20.41 Bid-YTW : 5.23 % |
| BAM.PR.X | FixedReset Disc | 1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 12.79 Evaluated at bid price : 12.79 Bid-YTW : 6.15 % |
| HSE.PR.E | FixedReset Disc | 1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 17.90 Evaluated at bid price : 17.90 Bid-YTW : 6.89 % |
| BAM.PF.B | FixedReset Disc | 1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 17.45 Evaluated at bid price : 17.45 Bid-YTW : 6.03 % |
| BMO.PR.S | FixedReset Disc | 1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 18.11 Evaluated at bid price : 18.11 Bid-YTW : 5.20 % |
| BAM.PF.I | FixedReset Disc | 1.20 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-03-31 Maturity Price : 25.00 Evaluated at bid price : 25.30 Bid-YTW : 4.72 % |
| HSE.PR.G | FixedReset Disc | 1.26 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 17.72 Evaluated at bid price : 17.72 Bid-YTW : 6.90 % |
| BAM.PF.E | FixedReset Disc | 1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 16.00 Evaluated at bid price : 16.00 Bid-YTW : 6.29 % |
| TD.PF.C | FixedReset Disc | 1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 17.15 Evaluated at bid price : 17.15 Bid-YTW : 5.34 % |
| TD.PF.A | FixedReset Disc | 1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 17.13 Evaluated at bid price : 17.13 Bid-YTW : 5.33 % |
| BIP.PR.E | FixedReset Disc | 1.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 21.78 Evaluated at bid price : 22.09 Bid-YTW : 5.66 % |
| BAM.PR.C | Floater | 1.37 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 11.12 Evaluated at bid price : 11.12 Bid-YTW : 6.34 % |
| TD.PF.E | FixedReset Disc | 1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 19.27 Evaluated at bid price : 19.27 Bid-YTW : 5.52 % |
| EMA.PR.F | FixedReset Disc | 1.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 16.55 Evaluated at bid price : 16.55 Bid-YTW : 6.10 % |
| MFC.PR.Q | FixedReset Ins Non | 1.52 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.75 Bid-YTW : 7.84 % |
| TD.PF.D | FixedReset Disc | 1.54 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 19.08 Evaluated at bid price : 19.08 Bid-YTW : 5.48 % |
| MFC.PR.N | FixedReset Ins Non | 1.61 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 15.80 Bid-YTW : 9.29 % |
| GWO.PR.N | FixedReset Ins Non | 1.64 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 14.28 Bid-YTW : 9.03 % |
| IAF.PR.G | FixedReset Ins Non | 1.64 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.17 Bid-YTW : 7.32 % |
| BMO.PR.C | FixedReset Disc | 1.66 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 21.84 Evaluated at bid price : 22.09 Bid-YTW : 5.31 % |
| RY.PR.M | FixedReset Disc | 1.71 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 18.46 Evaluated at bid price : 18.46 Bid-YTW : 5.41 % |
| PWF.PR.A | Floater | 1.73 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 11.74 Evaluated at bid price : 11.74 Bid-YTW : 5.96 % |
| SLF.PR.I | FixedReset Ins Non | 1.75 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.06 Bid-YTW : 8.00 % |
| CM.PR.S | FixedReset Disc | 1.76 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 19.08 Evaluated at bid price : 19.08 Bid-YTW : 5.26 % |
| IFC.PR.C | FixedReset Ins Non | 1.94 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.84 Bid-YTW : 8.12 % |
| PWF.PR.P | FixedReset Disc | 2.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 13.16 Evaluated at bid price : 13.16 Bid-YTW : 5.60 % |
| SLF.PR.G | FixedReset Ins Non | 2.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 13.13 Bid-YTW : 10.28 % |
| MFC.PR.G | FixedReset Ins Non | 2.17 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.40 Bid-YTW : 7.97 % |
| RY.PR.J | FixedReset Disc | 2.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 19.18 Evaluated at bid price : 19.18 Bid-YTW : 5.37 % |
| MFC.PR.I | FixedReset Ins Non | 2.52 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.12 Bid-YTW : 7.61 % |
| BAM.PR.K | Floater | 2.70 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 11.05 Evaluated at bid price : 11.05 Bid-YTW : 6.38 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TRP.PR.K | FixedReset Disc | 198,498 | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-05-31 Maturity Price : 25.00 Evaluated at bid price : 24.96 Bid-YTW : 5.05 % |
| EMA.PR.C | FixedReset Disc | 133,400 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 18.11 Evaluated at bid price : 18.11 Bid-YTW : 5.84 % |
| TRP.PR.C | FixedReset Disc | 100,400 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 11.95 Evaluated at bid price : 11.95 Bid-YTW : 6.04 % |
| SLF.PR.D | Deemed-Retractible | 98,260 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.50 Bid-YTW : 6.91 % |
| TD.PF.C | FixedReset Disc | 95,600 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-09-10 Maturity Price : 17.15 Evaluated at bid price : 17.15 Bid-YTW : 5.34 % |
| TRP.PR.J | FixedReset Prem | 86,677 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-05-31 Maturity Price : 25.00 Evaluated at bid price : 25.75 Bid-YTW : 3.80 % |
| There were 32 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| CM.PR.Q | FixedReset Disc | Quote: 18.30 – 18.95 Spot Rate : 0.6500 Average : 0.4570 YTW SCENARIO |
| CCS.PR.C | Deemed-Retractible | Quote: 24.35 – 24.92 Spot Rate : 0.5700 Average : 0.4059 YTW SCENARIO |
| BNS.PR.Y | FixedReset Bank Non | Quote: 24.28 – 24.80 Spot Rate : 0.5200 Average : 0.3826 YTW SCENARIO |
| CM.PR.P | FixedReset Disc | Quote: 16.40 – 16.95 Spot Rate : 0.5500 Average : 0.4201 YTW SCENARIO |
| MFC.PR.M | FixedReset Ins Non | Quote: 16.01 – 16.40 Spot Rate : 0.3900 Average : 0.2850 YTW SCENARIO |
| W.PR.K | FixedReset Prem | Quote: 25.32 – 25.71 Spot Rate : 0.3900 Average : 0.2858 YTW SCENARIO |
CALGARY, Sept. 10, 2019 /CNW/ – The Kinder Morgan Canada Limited (TSX: KML) board of directors today announced that it has agreed with Pembina Pipeline Corporation (TSX: PPL; NYSE: PBA) (Pembina) to amend and restate the previously announced arrangement agreement dated August 20, 2019 to include the preferred shares of KML in the arrangement transaction. If requisite approval by the holders of KML preferred shares is obtained, upon closing of the transaction, each outstanding KML preferred share of a series will be exchanged for a preferred share of Pembina with the same commercial terms and conditions as that series of KML preferred shares. The inclusion of KML preferred shares in the transaction is subject to approval by at least 66 2/3% of the votes cast by holders of KML preferred shares, voting together as a single class, present in person or represented by proxy at the special meeting of the holders of KML preferred shares to be held to approve the transaction, but is not a condition to closing of the transaction. If KML preferred shareholders do not approve the transaction but all other conditions to closing are satisfied or waived by the applicable party, the KML preferred shares will remain outstanding as shares in the capital of KML, which will be part of the Pembina group following completion of the transaction. None of the other terms of the transaction or the recommendations of the KML special committee or the board of directors of KML have changed from the descriptions included in KML’s press release dated August 21, 2019 or its material change report filed on SEDAR or Form 8-K filed on EDGAR on August 23, 2019.