How about those inflation numbers, eh?:
Canada’s inflation rate tumbled to its lowest level in almost two years last month, falling to 1.2 per cent as Canadians paid less for gasoline, video equipment and some types of clothing, while price gains in many other consumer goods moderated.
…
May also saw prices fall outright on a month-to-month basis, meaning the basket of about 175 goods and services that Statistics Canada surveys cost 0.1 per cent less overall in May than it had in April.Bank of Canada governor Mark Carney said this week he expected prices to dip below his two per cent target in the short term, given the recent drop in world oil prices, but that the underlying core rate – which excludes volatile items such as energy – would hover near the target. He was right on both counts, as core slipped to 1.8 per cent from 2.1 per cent in April.
Spain may join the rest of Europe in discarding 500 years of bankruptcy law:
Spanish policy makers are considering forcing investors who hold equity and junior debt in banks to absorb losses in a restructuring, according to a person with knowledge of the plan.
Such burden sharing is among conditions being negotiated with the European Union in a 100 billion-euro ($126 billion) rescue for Spain’s financial industry, said the person, who asked not to be named as the conversations are private. Depositors who bought subordinated instruments such as preferred stock may be partially shielded from losses through a compensation plan being considered, the person said.
I think Credit Rating Agency bashing may become an Olympic sport!:
Moody’s Investors Service suffered a downgrade of its own as markets responded to the company’s rating cuts of 15 of the world’s largest banks by bidding up the value of their stocks and bonds.
…
“The ratings agencies themselves are looking for a raison d’etre” as regulations in the U.S. and Europe try to reduce investors’ dependence on the credit assessments, David Zervos, chief market strategist at Jefferies & Co., said in an interview on Bloomberg Television’s “Market Makers.” “They like to be noisy, and this is a way to be noisy. I don’t think the effects are big in the end.”
…
“We view the Moody’s downgrade as another overhyped story of 2012,” David Trone, analyst at JMP Securities LLC, wrote to his clients. “The corporate market thinks for itself and credit rating agencies are often lagging indicators.”
I saw a hummingbird moth in my back yard this evening, nectaring on my milkweed. I hadn’t even known there was such a thing!
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It was a mildly positive day for the Canadian preferred share market, with PerpetualPremiums up 3bp and both FixedResets and DeemedRetractibles gaining 9bp. There was a surprising amount of volatility for such a quiet day, with no clear trend readily identifiable. Volume was extremely low.
| 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 | -0.1796 % | 2,310.5 |
| FixedFloater | 4.57 % | 3.95 % | 21,009 | 17.37 | 1 | -1.5632 % | 3,448.4 |
| Floater | 3.15 % | 3.15 % | 70,929 | 19.35 | 3 | -0.1796 % | 2,494.7 |
| OpRet | 4.79 % | 2.48 % | 36,247 | 1.00 | 5 | 0.3950 % | 2,517.7 |
| SplitShare | 5.27 % | -6.68 % | 44,100 | 0.49 | 4 | -0.2973 % | 2,718.6 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.3950 % | 2,302.2 |
| Perpetual-Premium | 5.41 % | 3.65 % | 89,088 | 0.56 | 27 | 0.0253 % | 2,239.5 |
| Perpetual-Discount | 5.04 % | 5.02 % | 117,030 | 15.42 | 7 | 0.0947 % | 2,455.7 |
| FixedReset | 5.04 % | 3.12 % | 197,735 | 7.79 | 71 | 0.0948 % | 2,397.8 |
| Deemed-Retractible | 5.01 % | 3.93 % | 148,711 | 2.87 | 45 | 0.0881 % | 2,308.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BAM.PR.G | FixedFloater | -1.56 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-06-22 Maturity Price : 21.67 Evaluated at bid price : 20.78 Bid-YTW : 3.95 % |
| BNA.PR.C | SplitShare | -1.10 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-01-10 Maturity Price : 25.00 Evaluated at bid price : 22.50 Bid-YTW : 6.30 % |
| FTS.PR.H | FixedReset | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-06-22 Maturity Price : 23.55 Evaluated at bid price : 25.47 Bid-YTW : 2.62 % |
| GWO.PR.M | Deemed-Retractible | -1.03 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 26.05 Bid-YTW : 5.26 % |
| BAM.PR.R | FixedReset | 1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-06-22 Maturity Price : 23.55 Evaluated at bid price : 26.02 Bid-YTW : 3.52 % |
| FTS.PR.E | OpRet | 1.25 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2013-06-01 Maturity Price : 25.75 Evaluated at bid price : 26.66 Bid-YTW : 1.28 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BNA.PR.C | SplitShare | 166,045 | Nesbitt crossed 150,000 at 22.50. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-01-10 Maturity Price : 25.00 Evaluated at bid price : 22.50 Bid-YTW : 6.30 % |
| TD.PR.K | FixedReset | 106,985 | Nesbitt crossed 100,000 at 26.90. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-31 Maturity Price : 25.00 Evaluated at bid price : 26.92 Bid-YTW : 2.94 % |
| BMO.PR.H | Deemed-Retractible | 87,542 | RBC crossed blocks of 51,500 and 25,000, both at 25.60. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-02-25 Maturity Price : 25.00 Evaluated at bid price : 25.60 Bid-YTW : 2.31 % |
| TRP.PR.B | FixedReset | 63,107 | Desjardins crossed 48,600 at 25.15. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-06-22 Maturity Price : 23.41 Evaluated at bid price : 25.10 Bid-YTW : 2.49 % |
| PWF.PR.I | Perpetual-Premium | 56,004 | Nesbitt crossed 25,000 at 25.50; RBC crossed the same amount at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2012-07-22 Maturity Price : 25.00 Evaluated at bid price : 25.50 Bid-YTW : -7.48 % |
| RY.PR.B | Deemed-Retractible | 52,846 | Desjardins crossed 50,000 at 25.70. YTW SCENARIO Maturity Type : Call Maturity Date : 2015-08-24 Maturity Price : 25.00 Evaluated at bid price : 25.68 Bid-YTW : 3.93 % |
| There were 14 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| W.PR.H | Perpetual-Premium | Quote: 26.05 – 27.50 Spot Rate : 1.4500 Average : 0.9282 YTW SCENARIO |
| FBS.PR.C | SplitShare | Quote: 10.80 – 11.48 Spot Rate : 0.6800 Average : 0.5527 YTW SCENARIO |
| BNA.PR.C | SplitShare | Quote: 22.50 – 22.83 Spot Rate : 0.3300 Average : 0.2200 YTW SCENARIO |
| SLF.PR.F | FixedReset | Quote: 26.15 – 26.44 Spot Rate : 0.2900 Average : 0.1835 YTW SCENARIO |
| TCA.PR.X | Perpetual-Premium | Quote: 51.56 – 52.13 Spot Rate : 0.5700 Average : 0.4731 YTW SCENARIO |
| GWO.PR.M | Deemed-Retractible | Quote: 26.05 – 26.39 Spot Rate : 0.3400 Average : 0.2470 YTW SCENARIO |