There was a net gain of 64,000 jobs in September, up from an increase of 40,000 in August, Statistics Canada said Friday in a report. This easily surpassed an estimate of 20,000 from Bay Street economists. The unemployment rate held steady at 5.5 per cent for the third consecutive month, as the country’s strong, immigration-driven population growth offset the employment gains.
The numbers in Friday’s report were decidedly mixed. Employment in educational services increased by 66,000 in September, after a drop of 44,000 in August – a volatile result that economists dismissed as a statistical quirk. Part-time roles accounted for most of the employment growth last month. And total hours worked across the economy fell 0.2 per cent.
Even so, compensation is climbing at elevated rates. Average hourly wages rose 5 per cent in September on a year-over-year basis, in line with increases in July and August.
And in the States:
In a sign of continued economic stamina, American payrolls grew by 336,000 in September on a seasonally adjusted basis, the Labor Department said on Friday.
The increase, almost double what economists had forecast, confirmed the labor market’s vitality and the overall hardiness of an economy facing challenges from a variety of forces.
It was the 33rd consecutive month of job growth, and the increase was the biggest since January.
The unemployment rate, based on a survey of households, was steady at 3.8 percent. It has been below 4 percent for nearly two years, a stretch not achieved since the late 1960s.
…
Hiring figures for July and August were revised upward, showing 119,000 more jobs than previously recorded. Taken together, the gains reflected confidence among employers that the economic recovery has plenty of room left to run.
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Average hourly earnings for workers rose 0.2 percent from the previous month and 4.2 percent from September 2022. While solid, the increase was smaller than anticipated, and the one-year pace was the slowest since March 2020.
All this created some excitement for Canadian fixed income markets:
Shorter-term bonds, which tend to be more sensitive to central bank policy moves, also had a big move. The Canada two-year bond yield was up about 13 basis points to 4.93% – though this was below the 5% level it had reached earlier this week.
Bond yields came off their highs at midday, but were still higher for the session. Equity markets initially tanked on the data, but they reversed into the green as investors digested the details of the employment reports. Some market observers noted stocks were becoming oversold in recent days and bargain hunters were making an appearance ahead of the weekend.
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The following table details how money markets are pricing in further moves in the Bank of Canada overnight rate, according to Refinitiv Eikon data as of 1045 am ET. The current Bank of Canada overnight rate is 5%. While the bank moves in quarter point increments, credit market implied rates fluctuate more fluidly and are constantly changing. Columns to the right are percentage probabilities of future rate moves.
Pre-Jobs:
Post-Jobs:
The TXPR price index closed at 505.06 today, down 0.27% on the day and just a hair above the September 22, pre-TD.PF.K-redemption, level of 505.05. Easy come, easy go! The index also hit a new 52-week low on the day, so that was fun. The Total Return Index Value (TRIV) for the index was up 62bp from September 22 until yesterday, though, for what it’s worth (62bp). The TRIV for today won’t be available until tomorrow.
| 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 | -0.8444 % | 2,155.7 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.8444 % | 4,134.7 |
| Floater | 11.30 % | 11.43 % | 61,334 | 8.54 | 2 | -0.8444 % | 2,382.8 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1179 % | 3,292.7 |
| SplitShare | 5.08 % | 8.44 % | 40,653 | 1.93 | 7 | -0.1179 % | 3,932.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1179 % | 3,068.1 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.6896 % | 2,430.5 |
| Perpetual-Discount | 7.06 % | 7.17 % | 43,066 | 12.39 | 31 | -0.6896 % | 2,650.3 |
| FixedReset Disc | 6.11 % | 9.54 % | 102,502 | 10.33 | 56 | 0.0421 % | 2,090.4 |
| Insurance Straight | 6.93 % | 7.08 % | 61,559 | 12.47 | 16 | -0.1299 % | 2,594.5 |
| FloatingReset | 11.35 % | 11.54 % | 37,080 | 8.47 | 1 | 0.3436 % | 2,348.3 |
| FixedReset Prem | 4.77 % | 5.04 % | 384,830 | 0.15 | 1 | 0.0000 % | 2,295.5 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0421 % | 2,136.8 |
| FixedReset Ins Non | 6.40 % | 9.28 % | 68,165 | 10.71 | 13 | -0.5704 % | 2,260.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| SLF.PR.H | FixedReset Ins Non | -8.60 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 14.13 Evaluated at bid price : 14.13 Bid-YTW : 10.26 % |
| RY.PR.O | Perpetual-Discount | -3.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 20.21 Evaluated at bid price : 20.21 Bid-YTW : 6.16 % |
| FTS.PR.F | Perpetual-Discount | -1.67 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 18.80 Evaluated at bid price : 18.80 Bid-YTW : 6.62 % |
| BN.PF.B | FixedReset Disc | -1.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 16.33 Evaluated at bid price : 16.33 Bid-YTW : 10.83 % |
| PWF.PR.T | FixedReset Disc | -1.61 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 18.50 Evaluated at bid price : 18.50 Bid-YTW : 9.30 % |
| BN.PR.N | Perpetual-Discount | -1.50 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 15.78 Evaluated at bid price : 15.78 Bid-YTW : 7.61 % |
| GWO.PR.M | Insurance Straight | -1.43 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 20.70 Evaluated at bid price : 20.70 Bid-YTW : 7.08 % |
| NA.PR.E | FixedReset Disc | -1.43 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 19.32 Evaluated at bid price : 19.32 Bid-YTW : 8.61 % |
| SLF.PR.C | Insurance Straight | -1.37 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 16.57 Evaluated at bid price : 16.57 Bid-YTW : 6.78 % |
| BN.PR.Z | FixedReset Disc | -1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 16.65 Evaluated at bid price : 16.65 Bid-YTW : 10.57 % |
| BN.PR.X | FixedReset Disc | -1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 12.55 Evaluated at bid price : 12.55 Bid-YTW : 11.57 % |
| TD.PF.A | FixedReset Disc | -1.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 17.56 Evaluated at bid price : 17.56 Bid-YTW : 9.30 % |
| BN.PF.H | FixedReset Disc | -1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 18.75 Evaluated at bid price : 18.75 Bid-YTW : 10.63 % |
| BN.PF.J | FixedReset Disc | 1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 18.20 Evaluated at bid price : 18.20 Bid-YTW : 9.89 % |
| NA.PR.G | FixedReset Disc | 1.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 21.84 Evaluated at bid price : 22.30 Bid-YTW : 8.11 % |
| RY.PR.J | FixedReset Disc | 2.49 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 17.68 Evaluated at bid price : 17.68 Bid-YTW : 9.63 % |
| PWF.PR.K | Perpetual-Discount | 2.87 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 17.23 Evaluated at bid price : 17.23 Bid-YTW : 7.21 % |
| BIP.PR.F | FixedReset Disc | 3.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 18.75 Evaluated at bid price : 18.75 Bid-YTW : 9.93 % |
| BMO.PR.Y | FixedReset Disc | 3.48 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 17.24 Evaluated at bid price : 17.24 Bid-YTW : 9.67 % |
| CU.PR.D | Perpetual-Discount | 5.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 17.55 Evaluated at bid price : 17.55 Bid-YTW : 7.10 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.K | FixedReset Prem | 97,865 | YTW SCENARIO Maturity Type : Call Maturity Date : 2023-11-30 Maturity Price : 25.00 Evaluated at bid price : 24.91 Bid-YTW : 5.04 % |
| MFC.PR.F | FixedReset Ins Non | 57,100 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 13.31 Evaluated at bid price : 13.31 Bid-YTW : 9.73 % |
| MFC.PR.M | FixedReset Ins Non | 52,500 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 17.36 Evaluated at bid price : 17.36 Bid-YTW : 9.59 % |
| RY.PR.M | FixedReset Disc | 34,350 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 16.75 Evaluated at bid price : 16.75 Bid-YTW : 9.70 % |
| BMO.PR.T | FixedReset Disc | 31,000 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 17.25 Evaluated at bid price : 17.25 Bid-YTW : 9.63 % |
| MFC.PR.L | FixedReset Ins Non | 29,407 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-10-06 Maturity Price : 17.80 Evaluated at bid price : 17.80 Bid-YTW : 9.28 % |
| There were 16 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| RY.PR.M | FixedReset Disc | Quote: 16.75 – 19.01 Spot Rate : 2.2600 Average : 1.2253 YTW SCENARIO |
| SLF.PR.H | FixedReset Ins Non | Quote: 14.13 – 15.75 Spot Rate : 1.6200 Average : 0.9554 YTW SCENARIO |
| PWF.PR.O | Perpetual-Discount | Quote: 20.18 – 21.00 Spot Rate : 0.8200 Average : 0.5986 YTW SCENARIO |
| PWF.PR.Z | Perpetual-Discount | Quote: 18.00 – 18.68 Spot Rate : 0.6800 Average : 0.4656 YTW SCENARIO |
| NA.PR.E | FixedReset Disc | Quote: 19.32 – 19.96 Spot Rate : 0.6400 Average : 0.4396 YTW SCENARIO |
| PWF.PR.P | FixedReset Disc | Quote: 12.06 – 12.97 Spot Rate : 0.9100 Average : 0.7220 YTW SCENARIO |