The CMHC is predicting a decline in house prices:
Canada Mortgage and Housing Corp., which was criticized in 2020 for sticking to a pessimistic outlook for housing prices early in the pandemic, is revising its forecast because the Bank of Canada will likely continue to hike its benchmark interest rate aggressively to slow runaway inflation, which makes it harder for residents to afford a mortgage.
The federal agency revised down the percentage gain it expects from 2021 to 2022, with the average price now forecast to climb 11 per cent instead of 13.7 per cent. The forecast is for the full year and it includes the first quarter when home prices peaked.
The agency also expects the average home price in Canada to decline as much as 5 per cent from the first quarter of this year to the second quarter of next, hitting a low of $742,970, according to a blog on CMHC’s website.
Although home prices have plummeted since the central bank started raising interest rates in March, CMHC chief economist Bob Dugan said he was “leery” of forecasting a steeper price decline when the housing shortage is so severe.
“I have trouble believing in a very big price correction,” Mr. Dugan said. “I don’t want to say that it can’t happen. It is possible for a 10-per-cent price correction like some people are saying. But I’m just leery of that because of the supply shortage,” he said.
It was a wild day for the TXPR as all the cowboys placed their bets on what the BoC is going to do tomorrow and how the market will react:
This chart does not do justice to the strength of the rally that began at about 3pm, since values after 4pm are cut off – the Exchange doesn’t seem to have a coherent policy about when their reporting should end! TXPR is shown as ending the day – after the Extended Trading Session – at 607.97, as opposed to its 4pm value of 605.39 (and its close yesterday at 610.21). The low for the day was 603.17, which I understand from other sources is a new 52-week 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 | -0.5383 % | 2,484.3 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.5383 % | 4,764.9 |
| Floater | 5.01 % | 5.02 % | 40,516 | 15.48 | 3 | -0.5383 % | 2,746.0 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2066 % | 3,498.4 |
| SplitShare | 4.86 % | 5.18 % | 44,271 | 3.16 | 8 | -0.2066 % | 4,177.8 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2066 % | 3,259.7 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2337 % | 2,843.9 |
| Perpetual-Discount | 5.99 % | 6.06 % | 67,206 | 13.82 | 34 | -0.2337 % | 3,101.1 |
| FixedReset Disc | 4.80 % | 6.49 % | 119,444 | 13.50 | 56 | -1.1338 % | 2,452.8 |
| Insurance Straight | 5.98 % | 6.07 % | 85,427 | 13.82 | 18 | -0.0188 % | 3,010.3 |
| FloatingReset | 6.21 % | 6.50 % | 43,935 | 13.20 | 2 | -1.0355 % | 2,560.0 |
| FixedReset Prem | 5.02 % | 4.89 % | 130,029 | 1.94 | 10 | -0.5329 % | 2,597.2 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -1.1338 % | 2,507.3 |
| FixedReset Ins Non | 4.80 % | 6.83 % | 56,814 | 13.24 | 14 | -1.0705 % | 2,541.1 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| FTS.PR.K | FixedReset Disc | -4.62 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 17.55 Evaluated at bid price : 17.55 Bid-YTW : 7.43 % |
| FTS.PR.H | FixedReset Disc | -4.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 13.95 Evaluated at bid price : 13.95 Bid-YTW : 7.47 % |
| MIC.PR.A | Perpetual-Discount | -3.98 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 20.75 Evaluated at bid price : 20.75 Bid-YTW : 6.57 % |
| BAM.PF.J | FixedReset Disc | -3.96 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 23.21 Evaluated at bid price : 24.00 Bid-YTW : 6.56 % |
| CU.PR.C | FixedReset Disc | -3.49 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 20.75 Evaluated at bid price : 20.75 Bid-YTW : 6.73 % |
| FTS.PR.M | FixedReset Disc | -3.46 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 19.26 Evaluated at bid price : 19.26 Bid-YTW : 7.15 % |
| BAM.PR.T | FixedReset Disc | -2.91 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 16.35 Evaluated at bid price : 16.35 Bid-YTW : 7.69 % |
| TRP.PR.E | FixedReset Disc | -2.80 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 17.02 Evaluated at bid price : 17.02 Bid-YTW : 7.81 % |
| MFC.PR.L | FixedReset Ins Non | -2.74 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 18.11 Evaluated at bid price : 18.11 Bid-YTW : 7.25 % |
| TRP.PR.G | FixedReset Disc | -2.70 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 19.07 Evaluated at bid price : 19.07 Bid-YTW : 7.31 % |
| BAM.PR.R | FixedReset Disc | -2.59 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 16.15 Evaluated at bid price : 16.15 Bid-YTW : 7.68 % |
| MFC.PR.M | FixedReset Ins Non | -2.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 18.57 Evaluated at bid price : 18.57 Bid-YTW : 7.22 % |
| FTS.PR.G | FixedReset Disc | -2.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 19.30 Evaluated at bid price : 19.30 Bid-YTW : 6.97 % |
| TRP.PR.B | FixedReset Disc | -2.32 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 12.21 Evaluated at bid price : 12.21 Bid-YTW : 8.09 % |
| TRP.PR.C | FixedReset Disc | -2.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 12.80 Evaluated at bid price : 12.80 Bid-YTW : 7.98 % |
| BAM.PR.B | Floater | -2.21 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 12.81 Evaluated at bid price : 12.81 Bid-YTW : 5.09 % |
| MFC.PR.N | FixedReset Ins Non | -2.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 18.21 Evaluated at bid price : 18.21 Bid-YTW : 7.22 % |
| TD.PF.J | FixedReset Disc | -2.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 22.65 Evaluated at bid price : 23.25 Bid-YTW : 6.32 % |
| SLF.PR.J | FloatingReset | -2.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 15.34 Evaluated at bid price : 15.34 Bid-YTW : 6.02 % |
| IFC.PR.G | FixedReset Ins Non | -2.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 21.20 Evaluated at bid price : 21.20 Bid-YTW : 6.83 % |
| RY.PR.O | Perpetual-Discount | -1.99 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 22.87 Evaluated at bid price : 23.13 Bid-YTW : 5.36 % |
| TRP.PR.D | FixedReset Disc | -1.97 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 17.42 Evaluated at bid price : 17.42 Bid-YTW : 7.79 % |
| PWF.PR.T | FixedReset Disc | -1.93 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 18.85 Evaluated at bid price : 18.85 Bid-YTW : 7.28 % |
| BAM.PF.F | FixedReset Disc | -1.77 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 19.45 Evaluated at bid price : 19.45 Bid-YTW : 7.51 % |
| BAM.PF.A | FixedReset Disc | -1.74 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 21.51 Evaluated at bid price : 21.51 Bid-YTW : 7.11 % |
| BAM.PF.B | FixedReset Disc | -1.68 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 19.30 Evaluated at bid price : 19.30 Bid-YTW : 7.43 % |
| RY.PR.S | FixedReset Disc | -1.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 23.09 Evaluated at bid price : 23.50 Bid-YTW : 5.96 % |
| MFC.PR.I | FixedReset Ins Non | -1.66 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 23.30 Evaluated at bid price : 24.35 Bid-YTW : 6.28 % |
| TD.PF.D | FixedReset Disc | -1.62 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 21.20 Evaluated at bid price : 21.20 Bid-YTW : 6.49 % |
| BAM.PR.M | Perpetual-Discount | -1.62 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 19.41 Evaluated at bid price : 19.41 Bid-YTW : 6.18 % |
| BAM.PF.E | FixedReset Disc | -1.61 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 17.71 Evaluated at bid price : 17.71 Bid-YTW : 7.60 % |
| BAM.PR.N | Perpetual-Discount | -1.48 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 19.36 Evaluated at bid price : 19.36 Bid-YTW : 6.19 % |
| GWO.PR.I | Insurance Straight | -1.46 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 18.87 Evaluated at bid price : 18.87 Bid-YTW : 6.02 % |
| NA.PR.S | FixedReset Disc | -1.41 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 21.01 Evaluated at bid price : 21.01 Bid-YTW : 6.50 % |
| TD.PF.L | FixedReset Prem | -1.39 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2024-04-30 Maturity Price : 25.00 Evaluated at bid price : 24.91 Bid-YTW : 5.27 % |
| BMO.PR.F | FixedReset Prem | -1.37 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2024-05-25 Maturity Price : 25.00 Evaluated at bid price : 25.15 Bid-YTW : 5.16 % |
| BAM.PR.Z | FixedReset Disc | -1.37 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 22.26 Evaluated at bid price : 23.01 Bid-YTW : 6.70 % |
| GWO.PR.Y | Insurance Straight | -1.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 18.82 Evaluated at bid price : 18.82 Bid-YTW : 6.04 % |
| IFC.PR.K | Perpetual-Discount | -1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 21.54 Evaluated at bid price : 21.85 Bid-YTW : 6.05 % |
| BAM.PF.I | FixedReset Prem | -1.34 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2027-03-31 Maturity Price : 25.00 Evaluated at bid price : 25.75 Bid-YTW : 4.74 % |
| TRP.PR.A | FixedReset Disc | -1.32 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 15.67 Evaluated at bid price : 15.67 Bid-YTW : 7.79 % |
| MFC.PR.J | FixedReset Ins Non | -1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 22.08 Evaluated at bid price : 22.72 Bid-YTW : 6.43 % |
| MFC.PR.F | FixedReset Ins Non | -1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 14.40 Evaluated at bid price : 14.40 Bid-YTW : 7.10 % |
| NA.PR.G | FixedReset Disc | -1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 22.84 Evaluated at bid price : 23.30 Bid-YTW : 6.34 % |
| NA.PR.W | FixedReset Disc | -1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 20.20 Evaluated at bid price : 20.20 Bid-YTW : 6.47 % |
| PWF.PR.G | Perpetual-Discount | -1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 23.95 Evaluated at bid price : 24.20 Bid-YTW : 6.10 % |
| TD.PF.B | FixedReset Disc | -1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 20.60 Evaluated at bid price : 20.60 Bid-YTW : 6.42 % |
| CM.PR.Q | FixedReset Disc | -1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 21.01 Evaluated at bid price : 21.01 Bid-YTW : 6.49 % |
| RY.PR.N | Perpetual-Discount | -1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 22.90 Evaluated at bid price : 23.25 Bid-YTW : 5.33 % |
| MFC.PR.Q | FixedReset Ins Non | -1.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 21.79 Evaluated at bid price : 22.26 Bid-YTW : 6.48 % |
| PWF.PR.P | FixedReset Disc | -1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 14.20 Evaluated at bid price : 14.20 Bid-YTW : 7.35 % |
| PWF.PR.E | Perpetual-Discount | 1.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 22.48 Evaluated at bid price : 22.74 Bid-YTW : 6.05 % |
| BIP.PR.F | FixedReset Disc | 1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 23.48 Evaluated at bid price : 23.90 Bid-YTW : 6.36 % |
| ELF.PR.F | Perpetual-Discount | 1.52 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 21.75 Evaluated at bid price : 22.00 Bid-YTW : 6.05 % |
| RY.PR.J | FixedReset Disc | 4.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 20.95 Evaluated at bid price : 20.95 Bid-YTW : 6.61 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BNS.PR.I | FixedReset Disc | 120,170 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 23.45 Evaluated at bid price : 23.86 Bid-YTW : 5.86 % |
| PWF.PR.T | FixedReset Disc | 107,540 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 18.85 Evaluated at bid price : 18.85 Bid-YTW : 7.28 % |
| BAM.PR.X | FixedReset Disc | 96,500 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 17.70 Evaluated at bid price : 17.70 Bid-YTW : 6.99 % |
| TD.PF.A | FixedReset Disc | 63,269 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 20.80 Evaluated at bid price : 20.80 Bid-YTW : 6.29 % |
| CM.PR.S | FixedReset Disc | 47,264 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 22.33 Evaluated at bid price : 23.15 Bid-YTW : 6.07 % |
| BMO.PR.E | FixedReset Disc | 43,100 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-07-12 Maturity Price : 23.14 Evaluated at bid price : 23.60 Bid-YTW : 6.24 % |
| There were 54 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| TRP.PR.B | FixedReset Disc | Quote: 12.21 – 14.16 Spot Rate : 1.9500 Average : 1.3436 YTW SCENARIO |
| TRP.PR.D | FixedReset Disc | Quote: 17.42 – 19.00 Spot Rate : 1.5800 Average : 0.9837 YTW SCENARIO |
| BAM.PF.J | FixedReset Disc | Quote: 24.00 – 25.11 Spot Rate : 1.1100 Average : 0.6205 YTW SCENARIO |
| GWO.PR.R | Insurance Straight | Quote: 19.90 – 21.00 Spot Rate : 1.1000 Average : 0.6559 YTW SCENARIO |
| FTS.PR.M | FixedReset Disc | Quote: 19.26 – 20.85 Spot Rate : 1.5900 Average : 1.1497 YTW SCENARIO |
| BAM.PR.T | FixedReset Disc | Quote: 16.35 – 18.00 Spot Rate : 1.6500 Average : 1.2164 YTW SCENARIO |
For once, it’s good to see floaters recognizing that a massive rise in prime is beneficial to the holders and a slight bump in price is well earned/deserved.
Shock and awe!
Which kind of raises the philosophical question on the divergence between the prime and other rates, as indicated by the bond market. The short term rates have to remain in congruence with the prime, but anything beyond 2/3 years, the two could remain widely divergent.
So the short end of the curve is buying the inflation hypothesis and the mechanisms to correct it, but the intermediate to long term remains nonchalant.
2 year rate- 3.3733%
30 year rate- 3.08%
As soon as the inflation and the underlying economy is crushed, expect a massive rush towards zero bound again.
We can arguably claim that the Central banks had been totally noncognizant of the asset bubbles they blew in the last 20/30 years, but as soon as they saw the rise in inflation, they acted quite ferociously to counter it, may be after a bit of snafu. Some might say it’s not enough, but I’m fairly satisfied that they are at least sticking to their mandate. It’s good to see such decisive action for a change.
“For once, it’s good to see floaters recognizing that a massive rise in prime is beneficial to the holders and a slight bump in price is well earned/deserved.”
Well, I haven’t seen much of a bump lately or maybe that is just that I do not own the right rate-reset or prime-linked preferreds haha
The day started with a lot of red and things got a bit better as the day went on but it appears as though the 100bps rate hike lifted more the perps than the rate-reset or at least, that’s what I noticed.
I know illiquidity is sometimes to blame but I keep being surprised at the number of erratic moves on some of the prefs.
For example, maybe there is something I do not get with BIP.PR.A but going from $21 at the beginning of the month to a low of $18.55 today feels nuts… and a fairly good opportunity in the RR landscape (imho).