Let’s have a trade war!
Canada is vowing to retaliate if U.S. President Donald Trump makes good on his pledge to impose steep tariffs on steel and aluminum producers — while holding out hope that it could be exempt.
Trump said he intends to slap a 25 percent duty on steel imports and 10 percent on aluminum in order to protect the national industry, though details remain unclear. His words sent U.S.-based producers rallying but could hurt companies that ship steel and aluminum from Canada, including Rio Tinto Group and Stelco Holdings Inc., without an exemption.
…
“The President has just initiated an all-out trade war,” said Jean Simard, chief executive officer of the Aluminum Association of Canada. Aside from the direct impact on the countries affected, Europe will need to protect itself from a flood of redirected metal because the U.S. is not an open market anymore, he said.“We have to keep hoping” for an exemption for Canada, Simard said.
London-based Rio Tinto, which ships more than 1.4 million metric tons of aluminum to the U.S. annually from Canada, said it will continue to lobby Washington for an exemption given the highly integrated Canada-U.S. market for autos and other manufactured goods.
President Donald Trump’s closest Republican allies on Capitol Hill are criticizing his plan to impose tariffs on steel and aluminum imports to protect national security, while some Democrats are applauding.
The upside-down reaction comes a day after Trump irked Republicans and pleased many Democrats by backing stricter gun-control measures and suggesting the government could take guns, initially without due process, from some citizens viewed as dangerous.
Enough of this could choke off the recovery and therefore delay the return to interest-rate normalcy:
Investments by foreign companies in Canada slumped last year to the lowest level since 2010, amid mounting concerns about national competitiveness and uncertainty surrounding the renegotiation of the North American Free Trade Agreement.
Foreign direct investment nosedived 26 per cent to $33.8 billion in 2017, Statistics Canada reported, continuing a trend of declining interest by foreign firms. And for the first time since data collection on the topic began in 2007, foreign firms sold more Canadian companies than they bought.
And it may be that we are finally getting our come-uppance for our cheap labour industrial strategy:
Energy companies are chopping their budgets even as global oil prices climb back from a crash, and may lose about C$16 billion ($12.4 billion) of revenue this year because of discounts on Alberta’s heavy crude — a problem blamed on a lack of pipeline space. Foreign direct investment in Canada, meanwhile, has fallen to the lowest since 2010.
Another unknown for investment prospects is how companies are dealing with production constraints. As firms bump up against production capacity at this high point in the economic cycle, you’d expect capital expenditure intentions to be widespread across industries. Yet capex is expected to increase just 0.8 percent even with capacity utilization hitting a 10-year high of 85 percent.
It’s possible companies are increasingly turning to the labor market to address excess demand, which would explain Canada’s string of red-hot jobs reports last year. That preference could further constrain business investment.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| 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 | -0.3622 % | 3,055.4 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3622 % | 5,606.5 |
| Floater | 3.25 % | 3.46 % | 101,478 | 18.56 | 4 | -0.3622 % | 3,231.1 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0550 % | 3,155.7 |
| SplitShare | 4.71 % | 4.13 % | 67,502 | 3.32 | 5 | -0.0550 % | 3,768.6 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0550 % | 2,940.4 |
| Perpetual-Premium | 5.46 % | 4.99 % | 79,167 | 14.42 | 20 | -0.1699 % | 2,820.6 |
| Perpetual-Discount | 5.43 % | 5.48 % | 85,677 | 14.64 | 14 | -0.1523 % | 2,931.8 |
| FixedReset | 4.26 % | 4.59 % | 165,607 | 5.92 | 102 | -0.3081 % | 2,517.1 |
| Deemed-Retractible | 5.20 % | 5.75 % | 93,250 | 5.77 | 28 | -0.2597 % | 2,900.1 |
| FloatingReset | 2.94 % | 2.93 % | 35,083 | 3.70 | 10 | -0.1650 % | 2,769.0 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| GWO.PR.I | Deemed-Retractible | -1.70 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.86 Bid-YTW : 7.59 % |
| SLF.PR.I | FixedReset | -1.65 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.85 Bid-YTW : 4.98 % |
| MFC.PR.R | FixedReset | -1.54 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-03-19 Maturity Price : 25.00 Evaluated at bid price : 25.50 Bid-YTW : 4.26 % |
| IFC.PR.C | FixedReset | -1.46 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.65 Bid-YTW : 5.01 % |
| TRP.PR.F | FloatingReset | -1.44 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-03-01 Maturity Price : 20.47 Evaluated at bid price : 20.47 Bid-YTW : 3.66 % |
| W.PR.J | Perpetual-Premium | -1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-03-01 Maturity Price : 24.05 Evaluated at bid price : 24.30 Bid-YTW : 5.84 % |
| TRP.PR.B | FixedReset | -1.21 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-03-01 Maturity Price : 17.10 Evaluated at bid price : 17.10 Bid-YTW : 4.64 % |
| BAM.PR.T | FixedReset | -1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-03-01 Maturity Price : 21.42 Evaluated at bid price : 21.42 Bid-YTW : 4.91 % |
| MFC.PR.M | FixedReset | -1.05 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.56 Bid-YTW : 5.25 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.A | FixedReset | 155,752 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-03-01 Maturity Price : 23.11 Evaluated at bid price : 23.51 Bid-YTW : 4.53 % |
| RY.PR.H | FixedReset | 153,395 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-03-01 Maturity Price : 23.07 Evaluated at bid price : 23.50 Bid-YTW : 4.53 % |
| BNS.PR.Q | FixedReset | 139,700 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.95 Bid-YTW : 3.88 % |
| MFC.PR.K | FixedReset | 126,800 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.93 Bid-YTW : 5.68 % |
| CM.PR.P | FixedReset | 114,055 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-03-01 Maturity Price : 22.98 Evaluated at bid price : 23.33 Bid-YTW : 4.54 % |
| PWF.PR.P | FixedReset | 72,160 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-03-01 Maturity Price : 19.70 Evaluated at bid price : 19.70 Bid-YTW : 4.39 % |
| There were 22 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| W.PR.J | Perpetual-Premium | Quote: 24.30 – 24.80 Spot Rate : 0.5000 Average : 0.3385 YTW SCENARIO |
| GWO.PR.I | Deemed-Retractible | Quote: 20.86 – 21.26 Spot Rate : 0.4000 Average : 0.2660 YTW SCENARIO |
| SLF.PR.I | FixedReset | Quote: 23.85 – 24.18 Spot Rate : 0.3300 Average : 0.2216 YTW SCENARIO |
| TRP.PR.A | FixedReset | Quote: 20.70 – 21.14 Spot Rate : 0.4400 Average : 0.3385 YTW SCENARIO |
| RY.PR.N | Perpetual-Premium | Quote: 24.70 – 24.95 Spot Rate : 0.2500 Average : 0.1686 YTW SCENARIO |
| TD.PF.D | FixedReset | Quote: 24.21 – 24.48 Spot Rate : 0.2700 Average : 0.2001 YTW SCENARIO |