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TXPR closed at 517.48, up 0.92% on the day. Volume today was 1.78-million, above the median of the past 21 trading days.

CPD closed at 10.25, up 0.89% on the day. Volume was 181,970, highest of the past 21 trading days.

ZPR closed at 8.73, up 1.39% on the day. Volume was 369,420, highest of the past 21 trading days.

Five-year Canada yields were down to 3.81%.

Equities and bonds also had a good day:

Global stock markets soared and bond yields plunged on Tuesday as cooler-than-expected U.S. inflation data boosted expectations that the Federal Reserve was done raising interest rates and was on the path to cutting them next year.

The S&P 500 closed up 1.9%, its best day since April, with the rate-sensitive real estate and utilities sectors posting their biggest daily percentage gains since November 2022. The TSX gained 1.6% to a near eight-week high in a broad-based advance that also was led by the real estate and utilities sectors.

In the 12 months through October, the consumer price index climbed 3.2% after rising 3.7% in September. Economists were expecting a 3.3% gain. Core prices, which exclude the volatile food and energy components, rose 4.0% compared with economists’ estimate of a 4.1% increase. Consumer prices were unchanged on a monthly basis, the first such reading in more than a year.
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Following the data, traders erased bets the Fed will raise borrowing costs any further and piled into bets on rate cuts starting by May. They are currently pricing in a 100% chance the Fed will hold rates next month, as per CME Group’s Fedwatch tool. U.S. rate futures priced in a more than 60% chance of a rate cut by the Fed in May next year.

Bond yields were down sharply across the curve. By late afternoon, both the U.S. two-year and 10-year bonds were down about 20 basis points, or one-fifth of a percentage point. The moves in Canadian bond yields, which take much of their direction from the U.S. treasury market, was a little less dramatic but were still large for a single day. The Canada five-year bond was yielding 3.804% by late afternoon, down 15 basis points, while the 10-year bond had retreated back to the lows of this past September.

Money markets also continue to increase bets that monetary easing is coming next year to Canada, where the economy has recently been more sluggish than in the U.S. and has been seeing similar downward trends in inflation. Implied probabilities in the swaps market on Tuesday showed just over a 50% chance of a quarter-point rate cut in the Bank of Canada’s overnight rate by April, with 75 basis points of cuts expected by the end of next year.
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Tuesday’s report from the Labor Department showed that prices either fell or rose more slowly across a broad range of goods and services, including gas, new and used cars, hotel rooms and housing. Gas prices fell 5 per cent from September to October and are down 5.3 per cent from a year earlier. They have continued to fall into November, suggesting that cheaper energy could hold down inflation this month as well.

This entry was posted on Tuesday, November 14th, 2023 at 9:49 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.