{"id":19528,"date":"2012-08-21T01:24:20","date_gmt":"2012-08-21T05:24:20","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=19528"},"modified":"2012-08-21T01:24:20","modified_gmt":"2012-08-21T05:24:20","slug":"august-20-2012","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=19528","title":{"rendered":"August 20, 2012"},"content":{"rendered":"

The Fed is pushing on a string<\/a>:<\/p>\n

The gap between U.S. bank deposits and loans is growing at the fastest pace in two years, providing lenders with more funds to buy bonds and temper the biggest sell-off in Treasuries since 2010.<\/p>\n

As deposits increased 3.3 percent to $8.88 trillion in the two months ended July 31, business lending rose 0.7 percent to $7.11 trillion, Federal Reserve data show. The record gap of $1.77 trillion has expanded 15 percent since May, the biggest similar-period gain since July, 2010. Banks have already bought $136.4 billion in Treasury and government agency debt this year, more than double the $62.6 billion in all of 2011, pushing their holdings to an all-time high of $1.84 trillion.
…<\/b>
\u201cEvery bank is looking for a way to increase their yield,\u201d said Mike Pearce, president of Bank of The West in Grapevine, Texas, whose company has been purchasing government securities after deposits grew faster than loans in 2010 and 2011. Instead of earning the Federal Funds rate of zero to 0.25 percent on the deposits, its bond holdings are yielding about 3.25 percent, he said.<\/p><\/blockquote>\n

The danger here is that when the economy starts picking up and people actually start competing with the Treasury for loans, yields will skyrocket. Who remembers 1994?<\/p>\n

It was a mixed day for the Canadian preferred share market, with PerpetualPremiums down 9bp, FixedResets off 7bp and DeemedRetractibles gaining 3bp. Volatility was minimal. Volume continued its recent pattern, with pockets of institutional activity and total lack of interest from retail.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices<\/strong>
Values are provisional and are finalized monthly<\/td>\n<\/tr>\n
Index<\/td>\nMean
Current
Yield
(at bid)<\/td>\n		Median
YTW<\/td>\n		Median
Average
Trading
Value<\/td>\n		Median
Mod Dur
(YTW)<\/td>\n		Issues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.7341 %<\/td>\n2,311.4<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.7341 %<\/td>\n3,457.6<\/td>\n<\/tr>\n
Floater<\/td>\n3.15 %<\/td>\n3.17 %<\/td>\n61,409<\/td>\n19.25<\/td>\n3<\/td>\n-0.7341 %<\/td>\n2,495.7<\/td>\n<\/tr>\n
OpRet<\/td>\n4.78 %<\/td>\n2.54 %<\/td>\n32,607<\/td>\n0.84<\/td>\n5<\/td>\n0.0846 %<\/td>\n2,544.0<\/td>\n<\/tr>\n
SplitShare<\/td>\n5.50 %<\/td>\n4.99 %<\/td>\n72,311<\/td>\n4.66<\/td>\n3<\/td>\n0.3815 %<\/td>\n2,790.6<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.0846 %<\/td>\n2,326.2<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.30 %<\/td>\n2.55 %<\/td>\n97,923<\/td>\n0.40<\/td>\n28<\/td>\n-0.0945 %<\/td>\n2,275.1<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n4.92 %<\/td>\n4.93 %<\/td>\n99,800<\/td>\n15.55<\/td>\n3<\/td>\n0.2768 %<\/td>\n2,543.3<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.99 %<\/td>\n3.08 %<\/td>\n176,343<\/td>\n3.95<\/td>\n71<\/td>\n-0.0728 %<\/td>\n2,425.9<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n4.94 %<\/td>\n2.65 %<\/td>\n129,719<\/td>\n1.15<\/td>\n46<\/td>\n0.0255 %<\/td>\n2,359.7<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
BAM.PR.B<\/td>\nFloater<\/td>\n-1.47 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-08-20
\nMaturity Price : 16.75
\nEvaluated at bid price : 16.75
\nBid-YTW : 3.16 %<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nShares
Traded<\/td>\n		Notes<\/td>\n<\/tr>\n
RY.PR.I<\/td>\nFixedReset<\/td>\n208,925<\/td>\nNesbitt crossed 207,500 at 25.75.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-02-24
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.70
\nBid-YTW : 3.07 %<\/td>\n<\/tr>\n
BNS.PR.Q<\/td>\nFixedReset<\/td>\n110,410<\/td>\nNational crossed 47,000 at 25.42 and sold 50,000 to Nesbitt at the same price.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.41
\nBid-YTW : 3.24 %<\/td>\n<\/tr>\n
HSB.PR.E<\/td>\nFixedReset<\/td>\n107,141<\/td>\nDesjardins crossed 103,500 at 27.00.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-06-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.90
\nBid-YTW : 2.92 %<\/td>\n<\/tr>\n
PWF.PR.I<\/td>\nPerpetual-Premium<\/td>\n77,050<\/td>\nNesbitt sold blocks of 30,000 and 15,000 to National at 25.41 and another 20,000 to RBC at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2012-09-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.40
\nBid-YTW : -9.15 %<\/td>\n<\/tr>\n
CM.PR.K<\/td>\nFixedReset<\/td>\n76,770<\/td>\nRBC crossed 70,000 at 26.35.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-07-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.25
\nBid-YTW : 2.87 %<\/td>\n<\/tr>\n
BMO.PR.P<\/td>\nFixedReset<\/td>\n62,100<\/td>\nRBC crossed 48,400 at 26.40.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2015-02-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.44
\nBid-YTW : 2.99 %<\/td>\n<\/tr>\n
There were 18 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n
Wide Spread Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nQuote Data and Yield Notes<\/td>\n<\/tr>\n
MFC.PR.A<\/td>\nOpRet<\/td>\nQuote: 25.26 – 25.81
\nSpot Rate : 0.5500
\nAverage : 0.3591<\/p>\n

YTW SCENARIO
\nMaturity Type : Soft Maturity
\nMaturity Date\t: 2015-12-18
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.26
\nBid-YTW : 3.68 %<\/td>\n<\/tr>\n

BAM.PR.C<\/td>\nFloater<\/td>\nQuote: 16.60 – 16.95
\nSpot Rate : 0.3500
\nAverage : 0.2155<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2042-08-20
\nMaturity Price : 16.60
\nEvaluated at bid price : 16.60
\nBid-YTW : 3.19 %<\/td>\n<\/tr>\n

VNR.PR.A<\/td>\nFixedReset<\/td>\nQuote: 25.81 – 26.05
\nSpot Rate : 0.2400
\nAverage : 0.1465<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-10-15
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.81
\nBid-YTW : 3.87 %<\/td>\n<\/tr>\n

ENB.PR.A<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.50 – 25.78
\nSpot Rate : 0.2800
\nAverage : 0.1890<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2012-09-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.50
\nBid-YTW : -19.77 %<\/td>\n<\/tr>\n

PWF.PR.I<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.40 – 25.66
\nSpot Rate : 0.2600
\nAverage : 0.1759<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2012-09-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.40
\nBid-YTW : -9.15 %<\/td>\n<\/tr>\n

BMO.PR.Q<\/td>\nFixedReset<\/td>\nQuote: 25.44 – 25.69
\nSpot Rate : 0.2500
\nAverage : 0.1725<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.44
\nBid-YTW : 2.97 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The Fed is pushing on a string: The gap between U.S. bank deposits and loans is growing at the fastest pace in two years, providing lenders with more funds to buy bonds and temper the …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-19528","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/19528","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19528"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/19528\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19528"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19528"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}