Rates, schmates. The US economy doesn’t care:
The United States economy grew faster early this year than previously believed.
Gross domestic product, adjusted for inflation, expanded at an annual rate of 2 percent in the first three months of the year, the Commerce Department said Thursday. That was a significant upward revision from the 1.1 percent growth rate in preliminary data released in April. (An earlier revision, released last month, showed a slightly stronger rate of 1.3 percent.)
An alternative measure of growth, based on income rather than production, painted a different picture, showing that the economy contracted for the second quarter in a row. That measure was also revised upward from the prior estimate.
…
Consumers are powering the recovery through their spending, which increased at a 4.2 percent rate in the first quarter, up from a 1 percent rate in late 2022 and faster than the 3.7 percent rate initially reported in April. That spending, fueled by a strong job market and rising wages, helped offset declines in other sectors of the economy like business investment and housing.
The BoC has released a Staff Discussion Paper by Marc-André Gosselin and Temel Taskin titled What Can Earnings Calls Tell Us About the Output Gap and Inflation in Canada?:
We construct new indicators of the imbalance between demand and supply for the Canadian economy by using natural language processing techniques to analyze earnings calls of publicly listed firms. The results show that the text-based indicators are highly correlated with official inflation data and estimates of the output gap and improve the accuracy of inflation forecasts. This suggests that these indicators could help central banks foresee inflationary pressures in the economy. Our examination of other topics in earnings calls, such as supply chain disruptions and capacity constraints, points to the potential benefits of using textual data to quickly draw insights on a range of relevant topics. We conclude that text-based measures of economic slack should be included in central banks’ monitoring and forecasting toolkits.
…
Canada’s estimate of the output gap in before the COVID-19 pandemic. However, these measures stop moving in tandem beginning in 2020. Specifically, the Bank’s measure of the output gap indicates a persistent state of excess supply since the start of the COVID-19 pandemic. In contrast, our novel estimate points to a sharp transition from excess supply to excess demand that coincides with the emergence of disruptions in global supply chains. This result is important because it shows that our text-based indicator can help provide more accurate forecasts of inflation. In addition, our estimate of slack is available to policy-makers in real time, whereas traditional measures of the output gap are available with a delay given the publication lag of two months for Canada’s gross domestic product (GDP). Moreover, our examination of other topics in earnings calls, such as supply chain disruptions and capacity constraints, shows the potential benefits of using textual data to draw timely insights on a broad range of relevant topics. We conclude that text-based measures of economic slack should be included in central banks’ toolkits for monitoring and forecasting inflation.
Independent Bay Street investment bank Canaccord Genuity Inc. is facing a potentially “significant penalty” related to its wholesale market-making business.
The warning was disclosed in one of several regulatory documents Canaccord filed Wednesday evening. In a separate filing, the company also said board chair David Kassie would step down from his executive management role following Canaccord’s Aug. 4 annual general meeting and would step down as chair one year later.
| 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 | -0.8696 % | 2,202.1 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.8696 % | 4,223.7 |
| Floater | 10.67 % | 10.79 % | 42,981 | 8.96 | 1 | -0.8696 % | 2,434.1 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1099 % | 3,258.6 |
| SplitShare | 5.15 % | 8.67 % | 51,288 | 2.17 | 6 | -0.1099 % | 3,891.5 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1099 % | 3,036.3 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3688 % | 2,536.4 |
| Perpetual-Discount | 6.73 % | 6.91 % | 40,849 | 12.65 | 31 | -0.3688 % | 2,765.8 |
| FixedReset Disc | 5.91 % | 8.49 % | 81,985 | 11.10 | 63 | -0.1677 % | 2,109.6 |
| Insurance Straight | 6.66 % | 6.67 % | 54,246 | 13.01 | 19 | -0.1636 % | 2,700.3 |
| FloatingReset | 11.45 % | 11.07 % | 31,024 | 8.77 | 2 | 0.4487 % | 2,361.9 |
| FixedReset Prem | 7.00 % | 7.16 % | 261,267 | 12.16 | 1 | -0.0398 % | 2,309.0 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1677 % | 2,156.4 |
| FixedReset Ins Non | 6.45 % | 8.01 % | 66,856 | 11.55 | 9 | -0.7537 % | 2,286.9 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| FTS.PR.K | FixedReset Disc | -6.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 15.18 Evaluated at bid price : 15.18 Bid-YTW : 9.57 % |
| CU.PR.D | Perpetual-Discount | -5.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 18.02 Evaluated at bid price : 18.02 Bid-YTW : 6.90 % |
| SLF.PR.E | Insurance Straight | -5.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 17.00 Evaluated at bid price : 17.00 Bid-YTW : 6.67 % |
| MFC.PR.I | FixedReset Ins Non | -3.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 20.27 Evaluated at bid price : 20.27 Bid-YTW : 8.01 % |
| BN.PF.I | FixedReset Disc | -1.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 18.76 Evaluated at bid price : 18.76 Bid-YTW : 9.30 % |
| BN.PF.J | FixedReset Disc | -1.57 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 20.04 Evaluated at bid price : 20.04 Bid-YTW : 8.36 % |
| CU.PR.F | Perpetual-Discount | -1.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 16.33 Evaluated at bid price : 16.33 Bid-YTW : 6.99 % |
| MFC.PR.Q | FixedReset Ins Non | -1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 19.66 Evaluated at bid price : 19.66 Bid-YTW : 8.10 % |
| PWF.PR.K | Perpetual-Discount | -1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 18.13 Evaluated at bid price : 18.13 Bid-YTW : 6.97 % |
| FTS.PR.H | FixedReset Disc | -1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 12.32 Evaluated at bid price : 12.32 Bid-YTW : 9.62 % |
| CU.PR.G | Perpetual-Discount | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 17.06 Evaluated at bid price : 17.06 Bid-YTW : 6.69 % |
| CCS.PR.C | Insurance Straight | 1.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 18.90 Evaluated at bid price : 18.90 Bid-YTW : 6.67 % |
| BIK.PR.A | FixedReset Disc | 1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 22.10 Evaluated at bid price : 22.75 Bid-YTW : 8.39 % |
| ELF.PR.F | Perpetual-Discount | 1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 19.29 Evaluated at bid price : 19.29 Bid-YTW : 6.90 % |
| PWF.PR.L | Perpetual-Discount | 2.75 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 18.66 Evaluated at bid price : 18.66 Bid-YTW : 6.98 % |
| GWO.PR.L | Insurance Straight | 3.70 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 20.47 Evaluated at bid price : 20.47 Bid-YTW : 6.96 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.K | FixedReset Disc | 100,100 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 21.63 Evaluated at bid price : 22.00 Bid-YTW : 7.30 % |
| CM.PR.S | FixedReset Disc | 42,487 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 20.15 Evaluated at bid price : 20.15 Bid-YTW : 7.58 % |
| RY.PR.Z | FixedReset Disc | 36,506 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 17.25 Evaluated at bid price : 17.25 Bid-YTW : 8.57 % |
| CM.PR.O | FixedReset Disc | 26,600 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 17.30 Evaluated at bid price : 17.30 Bid-YTW : 8.48 % |
| NA.PR.W | FixedReset Disc | 25,600 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 16.56 Evaluated at bid price : 16.56 Bid-YTW : 8.81 % |
| TD.PF.A | FixedReset Disc | 25,000 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-06-29 Maturity Price : 17.17 Evaluated at bid price : 17.17 Bid-YTW : 8.55 % |
| There were 6 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| GWO.PR.T | Insurance Straight | Quote: 19.00 – 21.50 Spot Rate : 2.5000 Average : 1.4241 YTW SCENARIO |
| FTS.PR.K | FixedReset Disc | Quote: 15.18 – 16.50 Spot Rate : 1.3200 Average : 0.8616 YTW SCENARIO |
| SLF.PR.E | Insurance Straight | Quote: 17.00 – 18.16 Spot Rate : 1.1600 Average : 0.8038 YTW SCENARIO |
| PWF.PR.H | Perpetual-Discount | Quote: 21.02 – 22.25 Spot Rate : 1.2300 Average : 0.8756 YTW SCENARIO |
| CU.PR.D | Perpetual-Discount | Quote: 18.02 – 18.98 Spot Rate : 0.9600 Average : 0.6330 YTW SCENARIO |
| MFC.PR.I | FixedReset Ins Non | Quote: 20.27 – 21.11 Spot Rate : 0.8400 Average : 0.5250 YTW SCENARIO |