{"id":26499,"date":"2014-10-07T20:26:54","date_gmt":"2014-10-08T01:26:54","guid":{"rendered":"http:\/\/prefblog.com\/?p=26499"},"modified":"2014-10-07T20:26:54","modified_gmt":"2014-10-08T01:26:54","slug":"october-7-2014","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=26499","title":{"rendered":"October 7, 2014"},"content":{"rendered":"

Europe isn’t looking very good<\/a>:<\/p>\n

U.K. 10-year government bonds rose with their German counterparts as a report showed factory orders in Europe\u2019s largest economy plunged the most since 2009 in August, underlining risks to the euro area\u2019s recovery.<\/p>\n

Five-year gilts advanced for the fifth time in six days. The yield fell last week to the lowest level since February as reports signaled the U.K. economy was losing momentum, fueling speculation the Bank of England will delay interest-rate increases. The pound declined versus the euro as Business Secretary Vince Cable said Britain\u2019s currency was still too strong and stifling exports.
…<\/b>
U.K. house prices fell for the first time in almost a year and a half in September, Nationwide Building Society said on Sept. 30, while a Markit Economics report on Oct. 3 showed services growth cooled more than economists forecast, further signs that the recovery may be losing enough momentum for the Bank of England to refrain from increasing borrowing costs. That has fueled gains in government bonds and slowed the rally in the pound.<\/p><\/blockquote>\n

… and there are renewed deflation fears<\/a>:<\/p>\n

Inflation in the euro area has fallen yet again and now stands at 0.3 percent. Prices are already falling in several of the European Union’s weaker economies. Even so-called core inflation, which excludes temporary factors and reveals the underlying trend, stands at less than 1 percent, a full percentage point below the ECB’s target.<\/p><\/blockquote>\n

… which is causing some to criticize Draghi and the ECB<\/a>:<\/p>\n

European Central Bank President Mario Draghi has disappointed investors and economists by failing to detail the size of the expansion he’s seeking in the central bank’s balance sheet. This much is clear from today’s investment bank research reports. Parsing Draghi’s comments from yesterday, as his favorite inflation measure fell to a record today, raises the chilling prospect that it may already be too late to avert deflation in the euro region — and that he knows it.<\/p>\n

For the first time, Draghi has abandoned the incantation he’s used for months against the perceived evils of falling prices: “Inflation expectations for the euro area over the medium to long term continue to be firmly anchored.” That’s how he put it in his opening remarks at the August monetary policy press conference, and then followed it up, at the question-and-answer session, with, “Long-term expectations remain anchored at 2 percent.”
…<\/b>
Yesterday, in addition to dropping the mantra from his speech, Draghi also demurred when he was directly asked if he thought inflationary expectations were anchored:<\/p>\n

Well, first of all, the inflation expectations — first of all, we don\u2019t use — let me get this clear, because there has been a certain amount of misunderstanding in the last few weeks — we don\u2019t use one single measure of inflation expectations. We use a broad range of indicators. And our inflation expectations measures have gone down especially on the short horizons and are now around 8 points below 2 percent on the five-year on five-year, and so we look at that with — definitely with great attention. I would say that the measures we\u2019ve taken have been determined exactly because our medium-term outlook on inflation expectation has worsened and we see that the risks have increased.<\/p><\/blockquote>\n

Lena Komileva, the chief economist at G Plus Economics in London, a research company, interpreted the absence as a sign the ECB is aware that the euro region risks what she calls “Japanification.” Annual inflation was just 0.3 percent last month; it hasn’t touched 2 percent since January 2013.<\/p><\/blockquote>\n

All this gloom had an effect<\/a>:<\/p>\n

\nStocks tumbled and bonds rallied, sending yields to the lowest since May 2013, as the International Monetary Fund cut its global outlook and German industrial production plunged. Oil slid to a 17-month low.<\/p>\n

The Standard & Poor\u2019s 500 Index (SPX) fell 1.5 percent to 1,935.10 at 4 p.m. in New York, the lowest level since Aug. 12. The Dow Jones Industrial Average lost 1.6 percent, the most since July. The yield on 30-year Treasuries retreated 8 basis points to 3.05 percent as investors sought safety. Oil tumbled 1.7 percent to the lowest since April 2013, while gold futures climbed 0.4 percent. Volatility rose, with the VIX jumping to the highest since March.<\/p>\n

The IMF cut its outlook for global growth in 2015 and warned about the risks of rising geopolitical tensions and a financial-market correction as stocks reach \u201cfrothy\u201d levels. German industrial production dropped 4 percent in August in the biggest decline since 2009.<\/p><\/blockquote>\n

With Hallowe’en fast approaching, I would be remiss if I didn’t alert Assiduous Readers to the BEST PRANK EVER<\/a>:<\/p>\n

A lewd statue of the devil that seemingly popped up overnight in East Vancouver has been taken down by city officials after raising eyebrows — among other things.<\/p>\n

The statue stood about eight to nine feet tall on a pedestal near the intersection of 4th Avenue and Clark Drive for several hours Tuesday.<\/p>\n

It was removed by city crews at around 3:15 p.m.<\/p>\n

The statue also appeared to sport a full erection, a detail that likely raised hell with some of the commuters who use the station.<\/p><\/blockquote>\n

\"satanStatue\"<\/a>
Click for … um … big<\/i><\/div>\n

It was a positive day for the Canadian preferred share market, with PerpetualDiscounts winning 18bp, FixedResets gaining 1bp and DeemedRetractibles up 2bp. Volatility was minimal. Volume was low.<\/p>\n\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>\n3.12 %<\/td>\n3.11 %<\/td>\n24,499<\/td>\n19.46<\/td>\n1<\/td>\n0.0416 %<\/td>\n2,677.1<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.1513 %<\/td>\n4,130.2<\/td>\n<\/tr>\n
Floater<\/td>\n2.88 %<\/td>\n3.03 %<\/td>\n58,295<\/td>\n19.68<\/td>\n4<\/td>\n0.1513 %<\/td>\n2,773.3<\/td>\n<\/tr>\n
OpRet<\/td>\n4.04 %<\/td>\n1.67 %<\/td>\n116,196<\/td>\n0.08<\/td>\n1<\/td>\n-0.0788 %<\/td>\n2,732.5<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.29 %<\/td>\n4.03 %<\/td>\n91,336<\/td>\n3.85<\/td>\n5<\/td>\n0.2738 %<\/td>\n3,152.4<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.0788 %<\/td>\n2,498.6<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.46 %<\/td>\n2.11 %<\/td>\n78,060<\/td>\n0.08<\/td>\n18<\/td>\n0.1157 %<\/td>\n2,451.6<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.31 %<\/td>\n5.15 %<\/td>\n96,080<\/td>\n15.12<\/td>\n18<\/td>\n0.1817 %<\/td>\n2,592.1<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.21 %<\/td>\n3.73 %<\/td>\n171,024<\/td>\n16.38<\/td>\n73<\/td>\n0.0061 %<\/td>\n2,554.7<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.01 %<\/td>\n2.10 %<\/td>\n102,459<\/td>\n0.23<\/td>\n42<\/td>\n0.0200 %<\/td>\n2,563.6<\/td>\n<\/tr>\n
FloatingReset<\/td>\n2.57 %<\/td>\n-6.56 %<\/td>\n65,011<\/td>\n0.08<\/td>\n6<\/td>\n-0.0261 %<\/td>\n2,553.6<\/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
PWF.PR.R<\/td>\nPerpetual-Premium<\/td>\n1.43 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2021-04-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.31
\nBid-YTW : 4.77 %<\/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
SLF.PR.E<\/td>\nDeemed-Retractible<\/td>\n108,841<\/td>\nNational crossed 78,800 at 22.21.
\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.29
\nBid-YTW : 5.97 %<\/td>\n<\/tr>\n
MFC.PR.A<\/td>\nOpRet<\/td>\n56,550<\/td>\nTD crossed two blocks of 26,000 each, both at 25.39.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-11-06
\nMaturity Price : 25.25
\nEvaluated at bid price : 25.35
\nBid-YTW : 1.67 %<\/td>\n<\/tr>\n
BMO.PR.W<\/td>\nFixedReset<\/td>\n52,939<\/td>\nTD crossed 40,000 at 25.08.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-07
\nMaturity Price : 23.18
\nEvaluated at bid price : 25.08
\nBid-YTW : 3.71 %<\/td>\n<\/tr>\n
ENB.PF.G<\/td>\nFixedReset<\/td>\n40,120<\/td>\nRecent new issue<\/a>.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-07
\nMaturity Price : 23.11
\nEvaluated at bid price : 25.00
\nBid-YTW : 4.21 %<\/td>\n<\/tr>\n
HSE.PR.A<\/td>\nFixedReset<\/td>\n28,350<\/td>\nNesbitt crossed 25,000 at 22.92.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-07
\nMaturity Price : 22.45
\nEvaluated at bid price : 22.85
\nBid-YTW : 3.71 %<\/td>\n<\/tr>\n
FTS.PR.M<\/td>\nFixedReset<\/td>\n28,344<\/td>\nRecent new issue<\/a>.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-07
\nMaturity Price : 23.19
\nEvaluated at bid price : 25.12
\nBid-YTW : 3.95 %<\/td>\n<\/tr>\n
There were 19 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
TRP.PR.A<\/td>\nFixedReset<\/td>\nQuote: 22.35 – 22.65
\nSpot Rate : 0.3000
\nAverage : 0.1872<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-07
\nMaturity Price : 21.87
\nEvaluated at bid price : 22.35
\nBid-YTW : 3.92 %<\/td>\n<\/tr>\n

MFC.PR.C<\/td>\nDeemed-Retractible<\/td>\nQuote: 22.68 – 22.95
\nSpot Rate : 0.2700
\nAverage : 0.1837<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.68
\nBid-YTW : 5.77 %<\/td>\n<\/tr>\n

TD.PR.Q<\/td>\nDeemed-Retractible<\/td>\nQuote: 25.91 – 26.19
\nSpot Rate : 0.2800
\nAverage : 0.2001<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-11-06
\nMaturity Price : 25.75
\nEvaluated at bid price : 25.91
\nBid-YTW : -6.35 %<\/td>\n<\/tr>\n

PWF.PR.P<\/td>\nFixedReset<\/td>\nQuote: 23.00 – 23.22
\nSpot Rate : 0.2200
\nAverage : 0.1572<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-07
\nMaturity Price : 22.56
\nEvaluated at bid price : 23.00
\nBid-YTW : 3.56 %<\/td>\n<\/tr>\n

BAM.PF.E<\/td>\nFixedReset<\/td>\nQuote: 24.51 – 24.78
\nSpot Rate : 0.2700
\nAverage : 0.2080<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2044-10-07
\nMaturity Price : 22.96
\nEvaluated at bid price : 24.51
\nBid-YTW : 4.21 %<\/td>\n<\/tr>\n

MFC.PR.F<\/td>\nFixedReset<\/td>\nQuote: 22.41 – 22.79
\nSpot Rate : 0.3800
\nAverage : 0.3205<\/p>\n

YTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.41
\nBid-YTW : 4.52 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Europe isn’t looking very good: U.K. 10-year government bonds rose with their German counterparts as a report showed factory orders in Europe\u2019s largest economy plunged the most since 2009 in August, underlining risks to 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-26499","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/26499","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=26499"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/26499\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26499"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26499"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26499"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}