OK, so the US PPI jumped a bit in August:
The Labor Department’s producer price index – which captures inflation before it reaches consumers – rose 5.4 per cent in August from a year ago, up from 4.8 per cent in July, the government said Thursday. Annual wholesale inflation peaked this year at 5.9 per cent in May after the Iran conflict raised energy costs. On a monthly basis, wholesale prices increased 0.4 per cent from July to August, after a 0.1-per-cent increase the previous month.
And investors were uninspired by the latest iteration of Operation Twist:
Treasury said on Wednesday it would buy as much as US$6 billion of debt maturing in 10 to 20 years in its next buyback operation, up from a $2 billion maximum previously. The amount was higher than the $4 billion minimum Treasury Secretary Scott Bessent outlined last month as part of an effort to improve liquidity in long-dated debt. That buyback was scheduled on Thursday.
But that was not enough to satisfy a market that has become increasingly concerned about the government’s capacity to support longer-dated Treasuries at a time when a generally stable economy and expanding deficits are pushing yields up.
The benchmark 10-year Treasury yield rose to its highest since November 2023 after the announcement, while the 20-year yield climbed to a three-week peak, as did the 30-year yield. Yields rise when prices fall.
U.S. yields extended their rise on Thursday after producer prices increased in August, and oil prices rose above $100 per barrel.
And bond yield jumped:
U.S. Treasury yields climbed on Thursday after the latest inflation reading pushed up expectations for a Federal Reserve interest rate hike next week, while soaring oil prices exacerbated inflation worries.
Canadian bond yields largely followed along, with both five-year and 10-year government yields up about 10 basis points. The Canadian five-year – key to fixed mortgage pricing – reached 3.641% by late afternoon, its highest since mid-2024.
…
The yield on benchmark U.S. 10-year notes rose 10.93 basis points to 4.946%, hitting its highest levels since October 2023.The 30-year bond yield rose 7.27 basis points to 5.3587%, reaching its highest point since June 2007.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 13.33 basis points to 4.56%, touching its highest point since July 2024.
And equities got smacked around a bit:
North American stocks ended down on Thursday after U.S. producer price data for August and surging oil prices stoked worries the Federal Reserve will hike interest rates next week, while climbing Treasury yields made stocks less attractive.
With supply routes through both the Strait of Hormuz and the Red Sea disrupted by the U.S.-Israeli war on Iran, Brent crude jumped 6% to US$107 a barrel, adding to inflation worries and fueling expectations the Fed will raise interest rates at its policy meeting on Wednesday.
Yields on 10-year U.S. Treasury notes rose to their highest in nearly three years, while 30-year Treasury yields hit their highest in more than 19 years and 2-year Treasury yields reached their highest in more than two years.
Canadian bond yields rose almost as much, with both five-year and 10-year government yields up about 10 basis points. The Canadian five-year – key to fixed mortgage pricing – reached 3.641% by late afternoon, its highest since mid-2024.
…
The S&P 500 declined 0.58% to end the session at 7,591.75 points.The Nasdaq declined 0.65% to 26,081.73 points, while the Dow Jones Industrial Average declined 0.60% to 52,064.10 points.
…
The S&P/TSX Composite Index ended down 400.28 points, or 1.11%, at 35,506.28. It marked the fourth straight daily decline for the index, which is the longest such streak since April, and the lowest closing level since July 31.
| 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 | -1.0573 % | 2,778.8 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -1.0573 % | 5,233.0 |
| Floater | 5.20 % | 5.24 % | 33,880 | 15.03 | 3 | -1.0573 % | 3,015.8 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0796 % | 3,626.3 |
| SplitShare | 4.66 % | 4.46 % | 55,954 | 2.55 | 4 | -0.0796 % | 4,330.6 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0796 % | 3,378.9 |
| Perpetual-Premium | 5.69 % | 5.69 % | 69,720 | 13.99 | 9 | -0.7819 % | 3,049.0 |
| Perpetual-Discount | 5.62 % | 5.73 % | 43,263 | 14.24 | 21 | -0.7754 % | 3,362.1 |
| FixedReset Disc | 5.57 % | 6.01 % | 89,816 | 13.78 | 21 | 0.8332 % | 3,416.7 |
| Insurance Straight | 5.55 % | 5.59 % | 46,948 | 14.47 | 19 | -1.0717 % | 3,243.8 |
| FloatingReset | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.8332 % | 4,171.9 |
| FixedReset Prem | 5.92 % | 4.11 % | 81,396 | 2.05 | 27 | -0.4261 % | 2,664.7 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.8332 % | 3,492.6 |
| FixedReset Ins Non | 5.21 % | 4.47 % | 51,240 | 1.90 | 14 | -0.3645 % | 3,278.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| PWF.PR.Z | Perpetual-Discount | -4.56 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.75 Evaluated at bid price : 22.00 Bid-YTW : 5.93 % |
| ENB.PR.D | FixedReset Disc | -4.13 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 22.59 Evaluated at bid price : 23.00 Bid-YTW : 6.31 % |
| GWO.PR.G | Insurance Straight | -3.81 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 22.49 Evaluated at bid price : 22.75 Bid-YTW : 5.72 % |
| PWF.PR.L | Perpetual-Discount | -3.55 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.75 Evaluated at bid price : 22.00 Bid-YTW : 5.87 % |
| MFC.PR.L | FixedReset Ins Non | -3.52 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 23.31 Evaluated at bid price : 24.70 Bid-YTW : 5.66 % |
| NA.PR.K | FixedReset Prem | -3.43 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2029-05-01 Maturity Price : 25.00 Evaluated at bid price : 28.15 Bid-YTW : 3.01 % |
| BN.PR.K | Floater | -3.23 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 14.70 Evaluated at bid price : 14.70 Bid-YTW : 5.40 % |
| NA.PR.I | FixedReset Prem | -3.13 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2029-05-01 Maturity Price : 25.00 Evaluated at bid price : 25.71 Bid-YTW : 5.91 % |
| CCS.PR.C | Insurance Straight | -2.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 22.47 Evaluated at bid price : 22.73 Bid-YTW : 5.50 % |
| ENB.PF.C | FixedReset Disc | -1.99 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 22.96 Evaluated at bid price : 24.10 Bid-YTW : 6.17 % |
| GWO.PR.Q | Insurance Straight | -1.94 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 22.55 Evaluated at bid price : 22.80 Bid-YTW : 5.65 % |
| BN.PF.M | FixedReset Prem | -1.90 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2031-01-01 Maturity Price : 25.00 Evaluated at bid price : 25.75 Bid-YTW : 5.18 % |
| PWF.PR.F | Perpetual-Discount | -1.78 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 22.91 Evaluated at bid price : 23.18 Bid-YTW : 5.73 % |
| CU.PR.G | Perpetual-Discount | -1.69 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 20.41 Evaluated at bid price : 20.41 Bid-YTW : 5.56 % |
| PWF.PR.E | Perpetual-Discount | -1.55 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 23.85 Evaluated at bid price : 24.10 Bid-YTW : 5.78 % |
| PWF.PR.O | Perpetual-Premium | -1.54 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 24.65 Evaluated at bid price : 24.91 Bid-YTW : 5.90 % |
| GWO.PR.H | Insurance Straight | -1.51 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.50 Evaluated at bid price : 21.50 Bid-YTW : 5.66 % |
| ENB.PR.Y | FixedReset Disc | -1.48 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 22.59 Evaluated at bid price : 23.25 Bid-YTW : 6.17 % |
| BN.PF.D | Perpetual-Discount | -1.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.45 Evaluated at bid price : 21.45 Bid-YTW : 5.83 % |
| GWO.PR.Z | Insurance Straight | -1.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 24.41 Evaluated at bid price : 24.81 Bid-YTW : 5.74 % |
| MFC.PR.B | Insurance Straight | -1.46 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.98 Evaluated at bid price : 22.22 Bid-YTW : 5.24 % |
| FTS.PR.F | Perpetual-Discount | -1.43 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 22.41 Evaluated at bid price : 22.67 Bid-YTW : 5.43 % |
| POW.PR.B | Perpetual-Discount | -1.40 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 23.61 Evaluated at bid price : 23.88 Bid-YTW : 5.69 % |
| SLF.PR.C | Insurance Straight | -1.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.03 Evaluated at bid price : 21.03 Bid-YTW : 5.31 % |
| MFC.PR.C | Insurance Straight | -1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.22 Evaluated at bid price : 21.22 Bid-YTW : 5.33 % |
| BN.PR.N | Perpetual-Discount | -1.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.04 Evaluated at bid price : 21.04 Bid-YTW : 5.76 % |
| PWF.PR.H | Perpetual-Premium | -1.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 24.61 Evaluated at bid price : 24.87 Bid-YTW : 5.85 % |
| PWF.PR.S | Perpetual-Discount | -1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.20 Evaluated at bid price : 21.20 Bid-YTW : 5.74 % |
| GWO.PR.M | Insurance Straight | -1.26 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2026-10-10 Maturity Price : 25.00 Evaluated at bid price : 25.14 Bid-YTW : -4.81 % |
| BN.PR.M | Perpetual-Discount | -1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 5.77 % |
| BN.PF.C | Perpetual-Discount | -1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.33 Evaluated at bid price : 21.33 Bid-YTW : 5.80 % |
| PWF.PR.G | Perpetual-Premium | -1.02 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2026-10-10 Maturity Price : 25.00 Evaluated at bid price : 25.24 Bid-YTW : 2.26 % |
| PWF.PR.K | Perpetual-Discount | 1.44 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.66 Evaluated at bid price : 21.91 Bid-YTW : 5.72 % |
| SLF.PR.D | Insurance Straight | 1.45 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 5.31 % |
| ENB.PF.G | FixedReset Disc | 1.82 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 23.12 Evaluated at bid price : 24.65 Bid-YTW : 6.06 % |
| CU.PR.J | Perpetual-Discount | 8.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 21.40 Evaluated at bid price : 21.40 Bid-YTW : 5.60 % |
| BN.PR.Z | FixedReset Disc | 29.25 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2027-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.85 Bid-YTW : 4.36 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| IFC.PR.C | FixedReset Ins Non | 322,100 | YTW SCENARIO Maturity Type : Call Maturity Date : 2026-10-30 Maturity Price : 25.00 Evaluated at bid price : 25.17 Bid-YTW : 5.04 % |
| BN.PF.F | FixedReset Prem | 135,200 | YTW SCENARIO Maturity Type : Call Maturity Date : 2029-10-01 Maturity Price : 25.00 Evaluated at bid price : 25.66 Bid-YTW : 5.33 % |
| BN.PR.K | Floater | 126,680 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2056-09-10 Maturity Price : 14.70 Evaluated at bid price : 14.70 Bid-YTW : 5.40 % |
| MFC.PR.N | FixedReset Ins Non | 51,800 | YTW SCENARIO Maturity Type : Call Maturity Date : 2030-03-20 Maturity Price : 25.00 Evaluated at bid price : 25.16 Bid-YTW : 4.96 % |
| ENB.PR.N | FixedReset Prem | 47,853 | YTW SCENARIO Maturity Type : Call Maturity Date : 2028-12-01 Maturity Price : 25.00 Evaluated at bid price : 25.42 Bid-YTW : 6.01 % |
| BILP.PR.A | FixedReset Prem | 17,440 | YTW SCENARIO Maturity Type : Call Maturity Date : 2031-10-01 Maturity Price : 25.00 Evaluated at bid price : 25.31 Bid-YTW : 5.43 % |
| There were 2 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 |
| ENB.PR.D | FixedReset Disc | Quote: 23.00 – 24.15 Spot Rate : 1.1500 Average : 0.6652 YTW SCENARIO |
| NA.PR.I | FixedReset Prem | Quote: 25.71 – 26.71 Spot Rate : 1.0000 Average : 0.5902 YTW SCENARIO |
| PWF.PR.Z | Perpetual-Discount | Quote: 22.00 – 23.00 Spot Rate : 1.0000 Average : 0.6203 YTW SCENARIO |
| MFC.PR.L | FixedReset Ins Non | Quote: 24.70 – 25.70 Spot Rate : 1.0000 Average : 0.6436 YTW SCENARIO |
| FTS.PR.F | Perpetual-Discount | Quote: 22.67 – 23.50 Spot Rate : 0.8300 Average : 0.5538 YTW SCENARIO |
| PWF.PR.L | Perpetual-Discount | Quote: 22.00 – 22.75 Spot Rate : 0.7500 Average : 0.5323 YTW SCENARIO |