The Survey of Consumer Expectations came out today:
Inflation
Median inflation expectations decreased at both the one- and three-year-ahead horizons in November, by 0.7 percentage point (to 5.2%) and by 0.1 percentage point, to 3.0%, respectively. Both decreases were broad-based across education and income groups. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at both horizons.
Median five-year-ahead inflation expectations, which have been elicited in the monthly SCE core survey on an ad-hoc basis since the beginning of this year and were first published in July 2022, also decreased, by 0.1 percentage point to 2.3%. Disagreement across respondents in their five-year-ahead inflation expectations decreased in November.
Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—decreased at both the short-term and medium-term horizon.
Median home price growth expectations dropped by 1.0 percentage point to 1. 0%, its lowest reading since May 2020. The decrease was broad-based across education and income groups but most pronounced for respondents from the South. Since August 2022, home price growth expectations have been well below their pre-pandemic levels.
Median year-ahead expected price changes declined by 0.6 percentage point for gas (to 4.7%), 0.8 percentage point for food (to 8.3%), and 0.1 percentage point for rent . The median expected change in the cost of medical care remained unchanged at 9.6%, while the median expected change in the cost of college education increased by 0.1 percentage point to 9.4%. *
Canadian debt payments climbed:
Canadians saw their wealth tumble and their debt obligations rise substantially during the summer as the Bank of Canada hiked interest rates in aggressive fashion.
Households made about $230-billion in debt payments during the third quarter, a record increase of 5.6 per cent from the second quarter, Statistics Canada said on Monday. In particular, the interest portion of debt payments jumped by 16.2 per cent, also a record.
Meanwhile, household net worth – the value of all assets minus liabilities – fell by around $330-billion during the third quarter, following a record decline of more than $930-billion between April and June. Despite the swoon, household net worth of $15.1-trillion remains about $2.7-trillion higher than at the end of 2019.
…
The household debt burden – more formally known as the ratio of credit market debt to disposable income – rose to 183.3 per cent in the third quarter from 182.6 per cent in the second quarter. The ratio is nearing a record of nearly 185 per cent in 2018.
…
As interest rates have risen, Canadians are taking on debt at a slower pace. Households added $33-billion of debt in the third quarter, down from about $57-billion in the second quarter. When interest rates were at rock-bottom levels in 2020 and 2021, Canadians were borrowing heavily, particularly for mortgages as home transactions hit record highs.All told, consumers have about $2.8-trillion in debt, of which $2.1-trillion is mortgages.
And Macklem warned that we shouldn’t celebrate peak policy rates just yet:
Bank of Canada Governor Tiff Macklem said there is a “greater risk” of not doing enough to tackle inflation than doing too much and damaging economic growth, even as the bank has signalled that it is nearing the end of its aggressive rate-hike cycle.
In a year-end speech in Vancouver, Mr. Macklem reiterated that the central bank has entered a new phase of monetary policy. After raising interest rates seven consecutive times, the bank has moved from asking how big the next rate hike should be to asking whether to raise interest rates at all. That could mean a pause to rate increases as early as January.
But Mr. Macklem also suggested that the bank remains concerned about throwing in the towel too early. The annual rate of inflation was 6.9 per cent in October, still more than three times the bank’s 2-per-cent inflation target.
“If we raise rates too much, we could drive the economy into an unnecessarily painful recession and undershoot the inflation target,” he said at the event, held by the Business Council of British Columbia.
“If we don’t raise them enough, inflation will remain elevated, and households and businesses will come to expect persistently high inflation. With inflation running well above target, this is the greater risk.”
| 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 | -1.1191 % | 2,377.6 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -1.1191 % | 4,560.3 |
| Floater | 9.12 % | 9.10 % | 64,174 | 10.28 | 2 | -1.1191 % | 2,628.1 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.5820 % | 3,267.3 |
| SplitShare | 5.20 % | 7.84 % | 53,773 | 2.75 | 8 | -0.5820 % | 3,901.9 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.5820 % | 3,044.4 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2622 % | 2,647.4 |
| Perpetual-Discount | 6.44 % | 6.57 % | 99,289 | 13.02 | 35 | -0.2622 % | 2,886.8 |
| FixedReset Disc | 5.49 % | 7.46 % | 98,898 | 12.23 | 62 | -1.2112 % | 2,188.0 |
| Insurance Straight | 6.43 % | 6.53 % | 102,473 | 13.20 | 20 | -0.4502 % | 2,794.8 |
| FloatingReset | 9.48 % | 9.88 % | 45,324 | 9.69 | 2 | -0.1600 % | 2,532.4 |
| FixedReset Prem | 6.59 % | 6.50 % | 192,733 | 12.76 | 2 | -0.0198 % | 2,383.7 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -1.2112 % | 2,236.5 |
| FixedReset Ins Non | 5.49 % | 7.60 % | 54,717 | 12.43 | 14 | -0.5922 % | 2,289.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.M | FixedReset Ins Non | -6.51 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 16.51 Evaluated at bid price : 16.51 Bid-YTW : 7.92 % |
| GWO.PR.Y | Insurance Straight | -2.86 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 17.00 Evaluated at bid price : 17.00 Bid-YTW : 6.65 % |
| PVS.PR.K | SplitShare | -2.56 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2029-05-31 Maturity Price : 25.00 Evaluated at bid price : 21.30 Bid-YTW : 7.43 % |
| BIP.PR.B | FixedReset Disc | -2.41 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 21.93 Evaluated at bid price : 22.25 Bid-YTW : 8.05 % |
| FTS.PR.H | FixedReset Disc | -2.37 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 12.35 Evaluated at bid price : 12.35 Bid-YTW : 8.25 % |
| BNS.PR.I | FixedReset Disc | -2.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 20.10 Evaluated at bid price : 20.10 Bid-YTW : 6.89 % |
| MFC.PR.K | FixedReset Ins Non | -1.98 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 17.30 Evaluated at bid price : 17.30 Bid-YTW : 7.64 % |
| RY.PR.J | FixedReset Disc | -1.95 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 18.63 Evaluated at bid price : 18.63 Bid-YTW : 7.29 % |
| IFC.PR.G | FixedReset Ins Non | -1.76 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 19.50 Evaluated at bid price : 19.50 Bid-YTW : 7.34 % |
| BMO.PR.F | FixedReset Disc | -1.72 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 23.50 Evaluated at bid price : 23.93 Bid-YTW : 6.78 % |
| TRP.PR.G | FixedReset Disc | -1.66 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 16.62 Evaluated at bid price : 16.62 Bid-YTW : 8.22 % |
| TRP.PR.E | FixedReset Disc | -1.60 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 15.35 Evaluated at bid price : 15.35 Bid-YTW : 8.59 % |
| RY.PR.S | FixedReset Disc | -1.54 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 20.50 Evaluated at bid price : 20.50 Bid-YTW : 6.65 % |
| TD.PF.A | FixedReset Disc | -1.43 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 17.20 Evaluated at bid price : 17.20 Bid-YTW : 7.52 % |
| BMO.PR.T | FixedReset Disc | -1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 17.30 Evaluated at bid price : 17.30 Bid-YTW : 7.47 % |
| RY.PR.M | FixedReset Disc | -1.41 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 18.15 Evaluated at bid price : 18.15 Bid-YTW : 7.17 % |
| TD.PF.K | FixedReset Disc | -1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 19.85 Evaluated at bid price : 19.85 Bid-YTW : 7.18 % |
| SLF.PR.C | Insurance Straight | -1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 17.80 Evaluated at bid price : 17.80 Bid-YTW : 6.28 % |
| TD.PF.E | FixedReset Disc | -1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 19.23 Evaluated at bid price : 19.23 Bid-YTW : 7.13 % |
| TRP.PR.D | FixedReset Disc | -1.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 15.93 Evaluated at bid price : 15.93 Bid-YTW : 8.45 % |
| PVS.PR.I | SplitShare | -1.29 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-10-31 Maturity Price : 25.00 Evaluated at bid price : 23.00 Bid-YTW : 7.98 % |
| NA.PR.E | FixedReset Disc | -1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 20.50 Evaluated at bid price : 20.50 Bid-YTW : 6.95 % |
| TD.PF.J | FixedReset Disc | -1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 21.20 Evaluated at bid price : 21.20 Bid-YTW : 6.88 % |
| CCS.PR.C | Insurance Straight | -1.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 19.18 Evaluated at bid price : 19.18 Bid-YTW : 6.55 % |
| BMO.PR.W | FixedReset Disc | -1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 17.60 Evaluated at bid price : 17.60 Bid-YTW : 7.32 % |
| RY.PR.N | Perpetual-Discount | -1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 21.14 Evaluated at bid price : 21.14 Bid-YTW : 5.86 % |
| FTS.PR.K | FixedReset Disc | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 15.50 Evaluated at bid price : 15.50 Bid-YTW : 8.19 % |
| TD.PF.B | FixedReset Disc | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 17.36 Evaluated at bid price : 17.36 Bid-YTW : 7.53 % |
| IFC.PR.K | Perpetual-Discount | -1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 20.58 Evaluated at bid price : 20.58 Bid-YTW : 6.53 % |
| SLF.PR.D | Insurance Straight | -1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 17.84 Evaluated at bid price : 17.84 Bid-YTW : 6.26 % |
| CM.PR.Q | FixedReset Disc | -1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 18.44 Evaluated at bid price : 18.44 Bid-YTW : 7.32 % |
| IFC.PR.I | Perpetual-Discount | 1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 21.43 Evaluated at bid price : 21.75 Bid-YTW : 6.33 % |
| BIP.PR.F | FixedReset Disc | 1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 19.06 Evaluated at bid price : 19.06 Bid-YTW : 7.81 % |
| MFC.PR.L | FixedReset Ins Non | 4.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 16.77 Evaluated at bid price : 16.77 Bid-YTW : 7.62 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| CU.PR.G | Perpetual-Discount | 83,100 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 6.50 % |
| POW.PR.G | Perpetual-Discount | 79,159 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 21.42 Evaluated at bid price : 21.68 Bid-YTW : 6.57 % |
| MFC.PR.C | Insurance Straight | 74,093 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 17.84 Evaluated at bid price : 17.84 Bid-YTW : 6.35 % |
| TD.PF.C | FixedReset Disc | 67,111 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 17.28 Evaluated at bid price : 17.28 Bid-YTW : 7.50 % |
| PWF.PR.Z | Perpetual-Discount | 51,350 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 19.75 Evaluated at bid price : 19.75 Bid-YTW : 6.63 % |
| MFC.PR.B | Insurance Straight | 48,425 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2052-12-12 Maturity Price : 18.42 Evaluated at bid price : 18.42 Bid-YTW : 6.35 % |
| There were 33 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| NA.PR.G | FixedReset Disc | Quote: 20.80 – 22.83 Spot Rate : 2.0300 Average : 1.1287 YTW SCENARIO |
| BN.PF.G | FixedReset Disc | Quote: 15.80 – 17.72 Spot Rate : 1.9200 Average : 1.3438 YTW SCENARIO |
| BN.PF.C | Perpetual-Discount | Quote: 18.50 – 19.87 Spot Rate : 1.3700 Average : 0.8194 YTW SCENARIO |
| BN.PF.B | FixedReset Disc | Quote: 16.55 – 18.19 Spot Rate : 1.6400 Average : 1.1264 YTW SCENARIO |
| BN.PF.I | FixedReset Disc | Quote: 21.69 – 23.00 Spot Rate : 1.3100 Average : 0.8574 YTW SCENARIO |
| BN.PF.F | FixedReset Disc | Quote: 17.00 – 18.25 Spot Rate : 1.2500 Average : 0.8658 YTW SCENARIO |