The BoC has released a Staff Analytical Note by Ramisha Asghar, James Fudurich and Jane Voll titled Firms’ inflation expectations and price-setting behaviour in Canada: Evidence from a business survey:
Implementing effective monetary policy could be more challenging for central banks if firms expect inflation to be high. Tightening monetary policy slows price growth by reducing overall demand, slowing cost increases and raising competitive pressure on firms. But high inflation expectations may encourage large price increases if firms believe that cost growth will remain high after a tightening of monetary policy. If left unchecked, high inflation and elevated inflation expectations could cause a wage-price spiral, anchoring high inflation with harmful economic consequences.1 Because of this risk, understanding whether high inflation expectations are influencing firms’ price-setting behaviour is critical to know for an inflationtargeting central bank.
We investigate whether the recent period of high inflation has changed how Canadian firms set prices for their products and services.
…
We find little evidence that firms’ price setting is directly based on high inflation expectations. However, we find that widespread growth in input prices during a period of strong customer demand and reduced competition may have contributed to price increases that were larger than usual. This may explain some of the inflationary pressure observed in 2021 and early 2022. Furthermore, early evidence suggests that in the second half of 2022, price-setting behaviour was gradually returning to pre-pandemic practices, supporting a path for inflation to return to the inflation-control target range. However, the risk remains that high inflation may start to be reflected directly in output prices, which would make it more difficult for monetary policy to reduce inflation.
OMERS had a good year … as long as their valuation of private equity is accurate!
The return OMERS reported for 2022 fell short of an internal benchmark of 7.2 per cent that was set at the end of 2021, when market conditions looked rosier. But it compares favourably with widespread investment losses across the sector after stock and bond prices plunged in the first half of last year.
Last week, Quebec-based pension giant Caisse de dépôt et placement du Québec reported a 5.6-per-cent loss in 2022. On average, Canadian defined pension plans performed much worse, with an average annual loss of 10.3 per cent, as measured by a typical mix of publicly held stocks and bonds tracked by Royal Bank of Canada’s RBC I&TS All Plan Universe.
…
Over 10 years, OMERS has averaged returns of 7.5 per cent, after expenses, which beat its multiyear benchmark of 7.4 per cent. The fund had assets of $124.2-billion as of Dec. 31, up from $119.5-billion at the end of June.
…
Though OMERS suffered losses in its equity and bond portfolios, which fell 5.4 per cent for the year, they were offset by returns from its investments in private assets, which include infrastructure, real estate and private equity.Private equity investments returned 13.7 per cent, ahead of an internal benchmark of 11.2 per cent, and the companies OMERS invests in through the portfolio broadly held their valuations during the year. Infrastructure investments gained 12.5 per cent, beating a 7.7-per-cent benchmark. And real estate investments gained 13.6 per cent, topping a 7.1-per-cent benchmark.
Canaccord shareholders want more money:
A special committee of Canaccord Genuity Inc.’s CF-T +0.79%increase
board of directors has said a bid to take the independent Canadian investment bank private is too low, after a group of the company’s senior leaders officially launched the takeover attempt early Monday.More than 50 members of the company’s management team, including chief executive Dan Daviau and board chair David Kassie, first announced plans last month to collectively launch the takeover bid, for $11.25 a share. The management group’s offer values the company at roughly $1.13-billion, despite a subsequent valuation prepared by Royal Bank of Canada RY-T +0.60%increase
for the special committee that found Canaccord to be worth significantly more.While the offer price represents a nearly 42-per-cent premium over the 20-day average price of Canaccord’s stock as of Jan. 6 – the last trading day before the management group announced its intention to take the company private – it is roughly 32 per cent below Canaccord’s November, 2021, value of $16.52 a share. Canaccord stock has been consistently trading above the proposed offer price since the planned takeover bid was made public on Jan. 9, suggesting investors expect the initial offer price to rise.
My Facebook feed lit up today with people as far south as Montana, Wyoming and Illinois posting glorious, once-in-a-lifetime shots of the Aurora Borealis:
Pictures shared online showed a bright green glow that seemed to be radiating from the grassy hilltops of Scotland. Others showed pink shades filling the sky behind the Neolithic site of Stonehenge in England and above the sharp cliffs on the coast of Ireland. The northern lights were seen across Sussex and Wales; above a cemetery; and from bedroom windows, backyards, a university and even planes.
It is quite common for northern lights to be spotted in Scotland and parts of Northern England, but it is much rarer to see them in southern parts of England. The display on Sunday was one of the best in a very long time, according to the BBC’s weather watchers, a crowdsourced weather club.
…
The northern lights are produced by charged particles from the sun that hit Earth’s magnetic field. They are generally visible by the poles, but if the geomagnetic storm is particularly strong, the particles can travel farther south, experts told The New York Times this year.The European Space Agency said that Sunday night, an expulsion of material from the sun arrived at Earth just as a high-speed solar wind stream whipped through the space around our planet.
Here’s one of my favourites, taken last night in Red Lake, Ontario:
| 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 | -0.4106 % | 2,564.1 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.4106 % | 4,917.8 |
| Floater | 8.79 % | 8.95 % | 53,138 | 10.33 | 2 | -0.4106 % | 2,834.2 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2511 % | 3,356.0 |
| SplitShare | 5.01 % | 6.64 % | 55,436 | 2.76 | 7 | 0.2511 % | 4,007.8 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2511 % | 3,127.0 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0899 % | 2,764.8 |
| Perpetual-Discount | 6.17 % | 6.28 % | 67,346 | 13.47 | 37 | -0.0899 % | 3,014.8 |
| FixedReset Disc | 5.40 % | 7.72 % | 86,828 | 11.77 | 59 | -0.1355 % | 2,258.6 |
| Insurance Straight | 6.04 % | 6.21 % | 88,549 | 13.53 | 20 | -0.2000 % | 2,972.1 |
| FloatingReset | 9.80 % | 10.08 % | 36,672 | 9.57 | 2 | -0.8027 % | 2,607.9 |
| FixedReset Prem | 6.41 % | 6.36 % | 217,071 | 3.99 | 2 | 0.1796 % | 2,366.4 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1355 % | 2,308.8 |
| FixedReset Ins Non | 5.28 % | 7.28 % | 49,892 | 12.25 | 14 | -0.3051 % | 2,444.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| TRP.PR.B | FixedReset Disc | -14.57 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 9.89 Evaluated at bid price : 9.89 Bid-YTW : 10.79 % |
| RY.PR.N | Perpetual-Discount | -2.54 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 21.88 Evaluated at bid price : 21.88 Bid-YTW : 5.64 % |
| RY.PR.O | Perpetual-Discount | -2.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 21.88 Evaluated at bid price : 21.88 Bid-YTW : 5.64 % |
| BN.PF.A | FixedReset Disc | -1.64 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 7.86 % |
| POW.PR.A | Perpetual-Discount | -1.62 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 22.22 Evaluated at bid price : 22.50 Bid-YTW : 6.31 % |
| BN.PF.G | FixedReset Disc | -1.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 16.53 Evaluated at bid price : 16.53 Bid-YTW : 9.05 % |
| GWO.PR.R | Insurance Straight | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 19.73 Evaluated at bid price : 19.73 Bid-YTW : 6.20 % |
| PWF.PR.K | Perpetual-Discount | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 19.93 Evaluated at bid price : 19.93 Bid-YTW : 6.29 % |
| FTS.PR.F | Perpetual-Discount | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 20.05 Evaluated at bid price : 20.05 Bid-YTW : 6.15 % |
| RY.PR.M | FixedReset Disc | -1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 18.30 Evaluated at bid price : 18.30 Bid-YTW : 7.74 % |
| NA.PR.W | FixedReset Disc | -1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 17.41 Evaluated at bid price : 17.41 Bid-YTW : 8.11 % |
| NA.PR.S | FixedReset Disc | 1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 18.52 Evaluated at bid price : 18.52 Bid-YTW : 7.99 % |
| BMO.PR.Y | FixedReset Disc | 1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 19.05 Evaluated at bid price : 19.05 Bid-YTW : 7.63 % |
| IAF.PR.B | Insurance Straight | 1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 19.75 Evaluated at bid price : 19.75 Bid-YTW : 5.83 % |
| MFC.PR.N | FixedReset Ins Non | 1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 17.52 Evaluated at bid price : 17.52 Bid-YTW : 8.01 % |
| MFC.PR.M | FixedReset Ins Non | 1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 17.90 Evaluated at bid price : 17.90 Bid-YTW : 8.00 % |
| MFC.PR.K | FixedReset Ins Non | 1.42 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 19.40 Evaluated at bid price : 19.40 Bid-YTW : 7.51 % |
| BIP.PR.B | FixedReset Disc | 1.43 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2025-12-31 Maturity Price : 25.00 Evaluated at bid price : 24.00 Bid-YTW : 6.92 % |
| TRP.PR.G | FixedReset Disc | 1.46 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 17.35 Evaluated at bid price : 17.35 Bid-YTW : 8.51 % |
| PWF.PR.Z | Perpetual-Discount | 1.70 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 20.92 Evaluated at bid price : 20.92 Bid-YTW : 6.24 % |
| BIK.PR.A | FixedReset Prem | 1.92 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 23.94 Evaluated at bid price : 24.40 Bid-YTW : 7.64 % |
| SLF.PR.G | FixedReset Ins Non | 2.26 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 13.55 Evaluated at bid price : 13.55 Bid-YTW : 8.38 % |
| CU.PR.I | FixedReset Disc | 3.03 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2025-12-01 Maturity Price : 25.00 Evaluated at bid price : 24.85 Bid-YTW : 4.74 % |
| CU.PR.H | Perpetual-Discount | 3.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 21.31 Evaluated at bid price : 21.31 Bid-YTW : 6.20 % |
| BIP.PR.A | FixedReset Disc | 5.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 18.20 Evaluated at bid price : 18.20 Bid-YTW : 9.10 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| NA.PR.S | FixedReset Disc | 58,300 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 18.52 Evaluated at bid price : 18.52 Bid-YTW : 7.99 % |
| TRP.PR.D | FixedReset Disc | 45,500 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 16.35 Evaluated at bid price : 16.35 Bid-YTW : 9.03 % |
| MFC.PR.L | FixedReset Ins Non | 28,400 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 8.04 % |
| IAF.PR.I | FixedReset Ins Non | 25,700 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 22.68 Evaluated at bid price : 23.79 Bid-YTW : 6.64 % |
| GWO.PR.N | FixedReset Ins Non | 17,600 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 12.58 Evaluated at bid price : 12.58 Bid-YTW : 8.56 % |
| CM.PR.S | FixedReset Disc | 16,500 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-02-27 Maturity Price : 22.06 Evaluated at bid price : 22.06 Bid-YTW : 6.90 % |
| There were 8 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: 9.89 – 11.73 Spot Rate : 1.8400 Average : 1.0450 YTW SCENARIO |
| IFC.PR.C | FixedReset Disc | Quote: 14.00 – 18.59 Spot Rate : 4.5900 Average : 3.8618 YTW SCENARIO |
| TD.PF.D | FixedReset Disc | Quote: 19.22 – 19.95 Spot Rate : 0.7300 Average : 0.4633 YTW SCENARIO |
| BIP.PR.F | FixedReset Disc | Quote: 21.05 – 21.94 Spot Rate : 0.8900 Average : 0.6398 YTW SCENARIO |
| BN.PF.I | FixedReset Disc | Quote: 22.75 – 23.43 Spot Rate : 0.6800 Average : 0.4588 YTW SCENARIO |
| PVS.PR.H | SplitShare | Quote: 22.26 – 23.45 Spot Rate : 1.1900 Average : 0.9834 YTW SCENARIO |
just announced this morning IAF.PR.I will be redeemed
Link for new release for the IAF.PR.I redemption:
https://ia.ca/newsroom/2023/february/iafg-announces-issuance-redemption-notice-holders-non-cumulative-5-year-rate-reset-class-a-preferred-shares-series-i
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