TD says the housing bubble is yesterday’s news:
TD Economics has gradually reduced its estimate of the overvaluation in Canada’s house prices, as the growth in people’s disposable income picks up while the market stagnates.
The quarterly economic forecast that the bank released Tuesday pegs the current overvaluation in the market at 10 per cent. It had previously estimated that prices were 15 per cent too high, and then suggested a range of 10 to 15 per cent.
Rick Waugh says the same thing:
Canada’s housing market is “at worst” destined for a soft landing, the head of one of the country’s largest banks predicted Tuesday.
Speaking in Toronto, Bank of Nova Scotia chief executive officer Rick Waugh said even though there is a housing bubble in Canada, he doesn’t expect the residential real estate market to crash.
I don’t have figures on how good either party is at predicting house prices.
The slow-motion bank run (is that a jog?) in Europe continues:
An accelerating flight of deposits from banks in four European countries is jeopardizing the renewal of economic growth and undermining a main tenet of the common currency: an integrated financial system.
A total of 326 billion euros ($425 billion) was pulled from banks in Spain, Portugal, Ireland and Greece in the 12 months ended July 31, according to data compiled by Bloomberg. The plight of Irish and Greek lenders, which were bleeding cash in 2010, spread to Spain and Portugal last year.
The flight of deposits from the four countries coincides with an increase of about 300 billion euros at lenders in seven nations considered the core of the euro zone, including Germany and France, almost matching the outflow. That’s leading to a fragmentation of credit and a two-tiered banking system blocking economic recovery and blunting European Central Bank policy in the third year of a sovereign-debt crisis.
It was a quiet day for the Canadian preferred share market, with PerpetualPremiums off 1bp, FixedResets up 4bp and DeemedRetractibles gaining 2bp. Volatility was muted. Volume was below 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 | 0.3655 % | 2,429.0 |
| FixedFloater | 4.57 % | 3.93 % | 34,750 | 17.43 | 1 | -0.0481 % | 3,485.6 |
| Floater | 3.02 % | 3.03 % | 58,819 | 19.66 | 3 | 0.3655 % | 2,622.7 |
| OpRet | 4.67 % | 3.33 % | 57,067 | 1.47 | 4 | -0.0577 % | 2,545.0 |
| SplitShare | 5.46 % | 4.97 % | 73,673 | 4.58 | 3 | 0.2660 % | 2,812.3 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0577 % | 2,327.1 |
| Perpetual-Premium | 5.28 % | 3.08 % | 88,014 | 1.03 | 28 | -0.0118 % | 2,281.4 |
| Perpetual-Discount | 4.96 % | 4.96 % | 97,182 | 15.60 | 3 | -0.1528 % | 2,544.1 |
| FixedReset | 4.96 % | 3.13 % | 175,327 | 4.27 | 72 | 0.0420 % | 2,427.5 |
| Deemed-Retractible | 4.95 % | 3.60 % | 119,266 | 1.24 | 46 | 0.0213 % | 2,366.9 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| SLF.PR.C | Deemed-Retractible | -1.12 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.00 Bid-YTW : 5.57 % |
| TRP.PR.A | FixedReset | -1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-09-18 Maturity Price : 23.66 Evaluated at bid price : 25.43 Bid-YTW : 3.32 % |
| HSE.PR.A | FixedReset | 1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-09-18 Maturity Price : 23.64 Evaluated at bid price : 26.12 Bid-YTW : 3.06 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| ENB.PR.P | FixedReset | 158,891 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-09-18 Maturity Price : 23.07 Evaluated at bid price : 24.93 Bid-YTW : 3.86 % |
| RY.PR.Y | FixedReset | 104,465 | National crossed blocks of 48,600 and 48,000, both at 26.90. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-11-24 Maturity Price : 25.00 Evaluated at bid price : 26.85 Bid-YTW : 2.80 % |
| RY.PR.C | Deemed-Retractible | 102,516 | RBC crossed 49,100 at 25.80; National crossed 50,000 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2015-11-24 Maturity Price : 25.00 Evaluated at bid price : 25.71 Bid-YTW : 3.77 % |
| TD.PR.A | FixedReset | 101,756 | Nesbitt crossed 95,000 at 25.94. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.94 Bid-YTW : 2.69 % |
| RY.PR.I | FixedReset | 91,428 | Nesbitt crossed 79,000 at 25.75. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-02-24 Maturity Price : 25.00 Evaluated at bid price : 25.73 Bid-YTW : 3.16 % |
| BAM.PF.B | FixedReset | 70,060 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2042-09-18 Maturity Price : 23.12 Evaluated at bid price : 25.08 Bid-YTW : 3.99 % |
| There were 22 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BNA.PR.D | SplitShare | Quote: 26.45 – 28.07 Spot Rate : 1.6200 Average : 0.9245 YTW SCENARIO |
| SLF.PR.C | Deemed-Retractible | Quote: 23.00 – 23.35 Spot Rate : 0.3500 Average : 0.2167 YTW SCENARIO |
| TD.PR.I | FixedReset | Quote: 26.95 – 27.25 Spot Rate : 0.3000 Average : 0.1796 YTW SCENARIO |
| TCA.PR.Y | Perpetual-Premium | Quote: 51.61 – 52.13 Spot Rate : 0.5200 Average : 0.4256 YTW SCENARIO |
| CU.PR.E | Perpetual-Premium | Quote: 25.91 – 26.15 Spot Rate : 0.2400 Average : 0.1779 YTW SCENARIO |
| FTS.PR.E | OpRet | Quote: 26.48 – 26.80 Spot Rate : 0.3200 Average : 0.2597 YTW SCENARIO |