The strength of US institutions was on display again today, as the New York Fed published a blog post titled Will New Steel Tariffs Protect U.S. Jobs?:
We argue that the new tariffs are likely to lead to a net loss in U.S. employment, at least in the short to medium run.
…
Research on markup adjustments more generally shows that a 10 percent increase in competitor prices leads to a 5 percent increase in domestic prices. With a 25 percent tax on imported steel, local steel producers can increase their markups and prices, and still stay competitive relative to foreign-produced inputs. This is the so-called protection that tariffs confer.However, firms that are dependent on steel and aluminum inputs—both importers and non-importers—will face higher prices. Downstream domestic producers will have to increase their prices or reduce markups, which makes them uncompetitive relative to competing imports. Similarly, U.S. exporters that need steel or steel-related inputs will face higher input costs and will have to either increase export prices or reduce their profit margins. These effects could lead to lower employment in these steel-intensive industries and possibly plant shut downs. Researchers estimate that the number of jobs in steel-intensive industries, which they define as industries with steel inputs of at least 5 percent of total, is around 2 million—for example, manufacturers of auto parts, motorcycles, and household appliances.
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I can’t imagine either Poluz or Carney authorizing the publication of anything like that! Canada is poorly served by its bootlicking class.
The 10-Year Treasury yield increased by 4bp today, which some blame on the commodity markets:
The recent weeks of sanctions, tariff dust-ups and tight oil supplies that jolted commodities prices higher have now got equities and Treasuries investors on the run, according to Weeden & Co.
Unlike in February, when optimism over global growth sent Treasury yields higher, this time it’s the price pressure from rising metals, Weeden’s Michael Purves wrote in a note to investors Thursday.
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Five year Canada yields were higher as well, closing at 2.16% … this should have been good news for FixedResets but, perversely, they got hit today along with everything else.
| 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 | -0.7463 % | 2,969.8 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.7463 % | 5,449.4 |
| Floater | 3.36 % | 3.58 % | 95,928 | 18.35 | 4 | -0.7463 % | 3,140.5 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0874 % | 3,151.2 |
| SplitShare | 4.61 % | 4.58 % | 78,070 | 5.10 | 5 | 0.0874 % | 3,763.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0874 % | 2,936.2 |
| Perpetual-Premium | 5.55 % | -7.68 % | 75,734 | 0.09 | 11 | -0.2323 % | 2,873.4 |
| Perpetual-Discount | 5.38 % | 5.42 % | 64,749 | 14.79 | 24 | -0.3042 % | 2,949.2 |
| FixedReset | 4.31 % | 4.73 % | 160,597 | 5.65 | 104 | -0.3088 % | 2,510.7 |
| Deemed-Retractible | 5.13 % | 5.73 % | 85,238 | 5.65 | 28 | -0.2035 % | 2,945.0 |
| FloatingReset | 3.03 % | 2.90 % | 32,205 | 3.59 | 11 | -0.1406 % | 2,762.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| TRP.PR.F | FloatingReset | -1.77 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 19.47 Evaluated at bid price : 19.47 Bid-YTW : 3.97 % |
| BAM.PF.E | FixedReset | -1.73 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 22.45 Evaluated at bid price : 22.77 Bid-YTW : 5.10 % |
| BAM.PF.C | Perpetual-Discount | -1.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 21.31 Evaluated at bid price : 21.31 Bid-YTW : 5.75 % |
| IFC.PR.A | FixedReset | -1.30 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.80 Bid-YTW : 7.55 % |
| TRP.PR.E | FixedReset | -1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 21.66 Evaluated at bid price : 22.09 Bid-YTW : 5.01 % |
| TRP.PR.B | FixedReset | -1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 16.49 Evaluated at bid price : 16.49 Bid-YTW : 4.94 % |
| HSE.PR.A | FixedReset | -1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 17.64 Evaluated at bid price : 17.64 Bid-YTW : 5.14 % |
| MFC.PR.I | FixedReset | -1.13 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-09-19 Maturity Price : 25.00 Evaluated at bid price : 24.57 Bid-YTW : 4.91 % |
| BAM.PF.B | FixedReset | -1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 22.66 Evaluated at bid price : 23.21 Bid-YTW : 5.08 % |
| BAM.PR.Z | FixedReset | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 22.92 Evaluated at bid price : 24.30 Bid-YTW : 5.07 % |
| TD.PF.D | FixedReset | -1.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 23.14 Evaluated at bid price : 24.10 Bid-YTW : 4.85 % |
| BAM.PR.B | Floater | -1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 16.90 Evaluated at bid price : 16.90 Bid-YTW : 3.59 % |
| BAM.PR.C | Floater | -1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 16.97 Evaluated at bid price : 16.97 Bid-YTW : 3.58 % |
| TRP.PR.D | FixedReset | -1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 21.68 Evaluated at bid price : 22.10 Bid-YTW : 5.03 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PR.S | FixedReset | 89,200 | YTW SCENARIO Maturity Type : Call Maturity Date : 2018-07-31 Maturity Price : 25.00 Evaluated at bid price : 24.96 Bid-YTW : 3.61 % |
| BMO.PR.Q | FixedReset | 66,000 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.91 Bid-YTW : 4.50 % |
| BMO.PR.W | FixedReset | 58,890 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 22.24 Evaluated at bid price : 22.60 Bid-YTW : 4.77 % |
| POW.PR.D | Perpetual-Discount | 58,016 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 22.74 Evaluated at bid price : 23.03 Bid-YTW : 5.45 % |
| NA.PR.S | FixedReset | 44,258 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2048-04-19 Maturity Price : 22.50 Evaluated at bid price : 23.00 Bid-YTW : 4.84 % |
| EIT.PR.B | SplitShare | 43,343 | YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2025-03-14 Maturity Price : 25.00 Evaluated at bid price : 25.04 Bid-YTW : 4.80 % |
| There were 25 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| BAM.PF.E | FixedReset | Quote: 22.77 – 23.10 Spot Rate : 0.3300 Average : 0.2098 YTW SCENARIO |
| BAM.PF.B | FixedReset | Quote: 23.21 – 23.45 Spot Rate : 0.2400 Average : 0.1522 YTW SCENARIO |
| TRP.PR.F | FloatingReset | Quote: 19.47 – 19.71 Spot Rate : 0.2400 Average : 0.1574 YTW SCENARIO |
| BAM.PF.H | FixedReset | Quote: 25.76 – 25.97 Spot Rate : 0.2100 Average : 0.1312 YTW SCENARIO |
| CU.PR.I | FixedReset | Quote: 26.00 – 26.26 Spot Rate : 0.2600 Average : 0.1829 YTW SCENARIO |
| MFC.PR.I | FixedReset | Quote: 24.57 – 24.80 Spot Rate : 0.2300 Average : 0.1545 YTW SCENARIO |