Short-term bond yields were sharply higher in both the U.S. and Canada. Money markets are now fully pricing in a quarter-point interest rate hike by the Bank of Canada by this July’s policy meeting. Almost three quarter-point rate hikes are priced in by the end of this year. Canada’s 2-year bond yield, sensitive to central bank policy moves, was up 23 basis points by late afternoon to its highest level in more than a year. For the Fed, interest-rate futures were pricing around a 25% chance of a rate hike by December.
…
Government bond yields in the U.S. and Europe spiked on Friday as investor concern intensified over the inflationary impact of the war-driven global energy shock, with expectations the pressure will not ease anytime soon.In the U.S., 10-year rates rose to their highest since last summer. Investors, long focused on the prospect of further interest-rate cuts this year, shifted to pricing in a moderate chance that the Fed will be forced to hike later this year.
British 10-year government borrowing costs also soared, rising to their highest level since the global financial crisis. The 10-year gilt yield pushed above 5 per cent, widely seen as a pressure point reflecting Britain’s economic vulnerability to rising energy costs.
German 10-year government bond yields hit their highest since the euro zone crisis in 2011. The 10-year yield , a benchmark for European government borrowing costs, hit a high of 3.025 per cent and was last up 7 basis points (bps) on the day. Yields rise as prices fall and vice versa.
ECB policymakers warned of growing inflation risks on Friday, but stopped short of calling for tighter policy, even as a host of brokerages started penciling in rate hikes from as soon as April.
…
About 11am – JH Canada’s five-year bond yield is up about 12 basis points to 3.196% and at its highest since June 2024.It started this week at about 3.062 per cent.
If this surge in yields sticks for long, it will undoubtedly result in upward pressure on fixed mortgages rates. It’s also likely to result in higher GIC payouts.
Long Canada yields were up 9bp on the day, while five-years were up an incredible 18bp to 3.23%.
| 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 | 0.0751 % | 2,465.3 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0751 % | 4,674.5 |
| Floater | 5.84 % | 6.02 % | 54,028 | 13.93 | 3 | 0.0751 % | 2,694.0 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3528 % | 3,667.9 |
| SplitShare | 4.76 % | 4.33 % | 77,734 | 0.92 | 5 | -0.3528 % | 4,380.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3528 % | 3,417.6 |
| Perpetual-Premium | 5.73 % | 5.83 % | 77,060 | 14.01 | 7 | -0.4039 % | 3,053.1 |
| Perpetual-Discount | 5.71 % | 5.76 % | 46,292 | 14.18 | 28 | -0.8536 % | 3,313.1 |
| FixedReset Disc | 5.92 % | 6.04 % | 116,898 | 13.69 | 27 | -0.3074 % | 3,181.7 |
| Insurance Straight | 5.64 % | 5.66 % | 61,986 | 14.44 | 22 | -0.7341 % | 3,227.2 |
| FloatingReset | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3074 % | 3,784.9 |
| FixedReset Prem | 6.01 % | 4.72 % | 88,621 | 2.45 | 21 | -0.4473 % | 2,640.8 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.3074 % | 3,252.3 |
| FixedReset Ins Non | 5.34 % | 5.60 % | 84,149 | 14.26 | 14 | -0.8390 % | 3,098.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| GWO.PR.T | Insurance Straight | -10.87 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 20.50 Evaluated at bid price : 20.50 Bid-YTW : 6.31 % |
| BN.PR.N | Perpetual-Discount | -6.73 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 18.71 Evaluated at bid price : 18.71 Bid-YTW : 6.38 % |
| SLF.PR.D | Insurance Straight | -5.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 19.90 Evaluated at bid price : 19.90 Bid-YTW : 5.62 % |
| IFC.PR.C | FixedReset Ins Non | -4.55 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 22.97 Evaluated at bid price : 23.72 Bid-YTW : 5.95 % |
| IFC.PR.K | Insurance Straight | -3.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 22.57 Evaluated at bid price : 22.90 Bid-YTW : 5.74 % |
| MFC.PR.F | FixedReset Ins Non | -3.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 18.75 Evaluated at bid price : 18.75 Bid-YTW : 5.97 % |
| ENB.PF.C | FixedReset Disc | -3.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 21.83 Evaluated at bid price : 22.20 Bid-YTW : 6.42 % |
| IFC.PR.F | Insurance Straight | -3.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 22.63 Evaluated at bid price : 22.90 Bid-YTW : 5.80 % |
| BN.PF.C | Perpetual-Discount | -2.77 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 20.01 Evaluated at bid price : 20.01 Bid-YTW : 6.09 % |
| IFC.PR.G | FixedReset Ins Non | -1.82 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 23.44 Evaluated at bid price : 24.80 Bid-YTW : 5.68 % |
| PWF.PR.F | Perpetual-Discount | -1.75 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 22.22 Evaluated at bid price : 22.50 Bid-YTW : 5.92 % |
| BN.PF.D | Perpetual-Discount | -1.73 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 20.50 Evaluated at bid price : 20.50 Bid-YTW : 6.01 % |
| FTS.PR.F | Perpetual-Discount | -1.57 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 21.75 Evaluated at bid price : 22.00 Bid-YTW : 5.61 % |
| BN.PF.M | FixedReset Prem | -1.52 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2031-01-01 Maturity Price : 25.00 Evaluated at bid price : 25.85 Bid-YTW : 4.83 % |
| TD.PF.I | FixedReset Prem | -1.48 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2027-10-31 Maturity Price : 25.00 Evaluated at bid price : 25.91 Bid-YTW : 4.52 % |
| ENB.PR.H | FixedReset Disc | -1.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 22.55 Evaluated at bid price : 23.06 Bid-YTW : 5.82 % |
| BN.PR.M | Perpetual-Discount | -1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 19.86 Evaluated at bid price : 19.86 Bid-YTW : 6.01 % |
| PWF.PR.R | Perpetual-Discount | -1.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 23.57 Evaluated at bid price : 23.84 Bid-YTW : 5.85 % |
| PWF.PR.T | FixedReset Disc | -1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 23.20 Evaluated at bid price : 24.48 Bid-YTW : 5.61 % |
| MFC.PR.B | Insurance Straight | -1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 21.45 Evaluated at bid price : 21.45 Bid-YTW : 5.46 % |
| POW.PR.D | Perpetual-Discount | -1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 22.07 Evaluated at bid price : 22.30 Bid-YTW : 5.70 % |
| BN.PR.X | FixedReset Disc | -1.01 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 19.60 Evaluated at bid price : 19.60 Bid-YTW : 6.22 % |
| FTS.PR.J | Perpetual-Discount | -1.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 21.52 Evaluated at bid price : 21.78 Bid-YTW : 5.49 % |
| BN.PR.R | FixedReset Disc | 1.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 21.70 Evaluated at bid price : 22.10 Bid-YTW : 6.04 % |
| GWO.PR.S | Insurance Straight | 4.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 22.71 Evaluated at bid price : 22.95 Bid-YTW : 5.73 % |
| GWO.PR.M | Insurance Straight | 5.44 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2026-04-19 Maturity Price : 25.00 Evaluated at bid price : 25.20 Bid-YTW : -6.13 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| GWO.PR.N | FixedReset Ins Non | 37,225 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 18.20 Evaluated at bid price : 18.20 Bid-YTW : 5.92 % |
| ENB.PR.T | FixedReset Disc | 33,526 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 22.80 Evaluated at bid price : 23.70 Bid-YTW : 6.06 % |
| NA.PR.S | FixedReset Prem | 24,800 | YTW SCENARIO Maturity Type : Call Maturity Date : 2029-05-15 Maturity Price : 25.00 Evaluated at bid price : 26.18 Bid-YTW : 4.80 % |
| BN.PF.J | FixedReset Prem | 23,111 | YTW SCENARIO Maturity Type : Call Maturity Date : 2027-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.29 Bid-YTW : 5.46 % |
| POW.PR.G | Perpetual-Discount | 22,750 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 24.45 Evaluated at bid price : 24.69 Bid-YTW : 5.77 % |
| ENB.PR.H | FixedReset Disc | 16,018 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-03-20 Maturity Price : 22.55 Evaluated at bid price : 23.06 Bid-YTW : 5.82 % |
| There were 14 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| See TMX DataLinx: ‘Last’ != ‘Close’ and the posts linked therein for an idea of why these quotes are so horrible. | ||
| Issue | Index | Quote Data and Yield Notes |
| GWO.PR.T | Insurance Straight | Quote: 20.50 – 23.00 Spot Rate : 2.5000 Average : 1.4365 YTW SCENARIO |
| GWO.PR.G | Insurance Straight | Quote: 23.10 – 24.87 Spot Rate : 1.7700 Average : 1.0724 YTW SCENARIO |
| BN.PR.N | Perpetual-Discount | Quote: 18.71 – 20.20 Spot Rate : 1.4900 Average : 0.9089 YTW SCENARIO |
| IFC.PR.C | FixedReset Ins Non | Quote: 23.72 – 24.88 Spot Rate : 1.1600 Average : 0.6631 YTW SCENARIO |
| SLF.PR.D | Insurance Straight | Quote: 19.90 – 20.90 Spot Rate : 1.0000 Average : 0.6395 YTW SCENARIO |
| GWO.PR.R | Insurance Straight | Quote: 21.27 – 22.09 Spot Rate : 0.8200 Average : 0.5484 YTW SCENARIO |