{"id":46135,"date":"2023-12-06T20:33:01","date_gmt":"2023-12-07T01:33:01","guid":{"rendered":"https:\/\/prefblog.com\/?p=46135"},"modified":"2023-12-06T20:33:01","modified_gmt":"2023-12-07T01:33:01","slug":"december-6-2023","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=46135","title":{"rendered":"December 6, 2023"},"content":{"rendered":"

The BoC stood pat on the policy rate<\/a>:<\/p>\n

The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5\u00bc% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.<\/p>\n

The global economy continues to slow and inflation has eased further. In the United States, growth has been stronger than expected, led by robust consumer spending, but is likely to weaken in the months ahead as past policy rate increases work their way through the economy. Growth in the euro area has weakened and, combined with lower energy prices, this has reduced inflationary pressures. Oil prices are about $10-per-barrel lower than was assumed in the October Monetary Policy Report (MPR). Financial conditions have also eased, with long-term interest rates unwinding some of the sharp increases seen earlier in the autumn. The US dollar has weakened against most currencies, including Canada\u2019s.<\/p>\n

In Canada, economic growth stalled through the middle quarters of 2023. Real GDP contracted at a rate of 1.1% in the third quarter, following growth of 1.4% in the second quarter. Higher interest rates are clearly restraining spending: consumption growth in the last two quarters was close to zero, and business investment has been volatile but essentially flat over the past year. Exports and inventory adjustment subtracted from GDP growth in the third quarter, while government spending and new home construction provided a boost. The labour market continues to ease: job creation has been slower than labour force growth, job vacancies have declined further, and the unemployment rate has risen modestly. Even so, wages are still rising by 4-5%. Overall, these data and indicators for the fourth quarter suggest the economy is no longer in excess demand.<\/p>\n

The slowdown in the economy is reducing inflationary pressures in a broadening range of goods and services prices. Combined with the drop in gasoline prices, this contributed to the easing of CPI inflation to 3.1% in October. However, shelter price inflation has picked up, reflecting faster growth in rent and other housing costs along with the continued contribution from elevated mortgage interest costs. In recent months, the Bank\u2019s preferred measures of core inflation have been around 3\u00bd-4%, with the October data coming in towards the lower end of this range.<\/p>\n

With further signs that monetary policy is moderating spending and relieving price pressures, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank\u2019s balance sheet. Governing Council is still concerned about risks to the outlook for inflation and remains prepared to raise the policy rate further if needed. Governing Council wants to see further and sustained easing in core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.<\/p><\/blockquote>\n

At 3.42% the five year Canada rate<\/a> has now retreated to the high-end of what I think should be a stable range of 3.00-3.50%.<\/p>\n

PerpetualDiscounts now yield 6.92%, equivalent to 9.00% interest at the standard equivalency factor of 1.3x. Long corporates<\/a> yielded 5.40% on 2023-11-24 and since then the closing price has changed from 14.58 to 15.30, an increase of 493bp in price, with a Duration (BMO doesn’t specify Modified or Macaulay – I will assume the former) of 12.15 implying a decrease of 41bp in yield to 4.99%, so the pre-tax interest-equivalent spread (in this context, the \u201cSeniority Spread\u201d) has widened to 400bp from the 375bp reported November 29<\/a>.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
HIMIPref\u2122 Preferred Indices
\nThese values reflect the December 2008 revision of the HIMIPref\u2122 Indices<\/strong>
\nValues are provisional and are finalized monthly<\/td>\n<\/tr>\n
Index<\/td>\nMean
\nCurrent
\nYield
\n(at bid)<\/td>\n		Median
\nYTW<\/td>\n		Median
\nAverage
\nTrading
\nValue<\/td>\n		Median
\nMod Dur
\n(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-0.3695 %<\/td>\n2,084.2<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.3695 %<\/td>\n3,997.5<\/td>\n<\/tr>\n
Floater<\/td>\n11.68 %<\/td>\n12.09 %<\/td>\n42,797<\/td>\n7.97<\/td>\n2<\/td>\n-0.3695 %<\/td>\n2,303.8<\/td>\n<\/tr>\n
OpRet<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.1057 %<\/td>\n3,386.7<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.96 %<\/td>\n7.11 %<\/td>\n53,097<\/td>\n1.80<\/td>\n8<\/td>\n0.1057 %<\/td>\n4,044.5<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.1057 %<\/td>\n3,155.6<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n0.2765 %<\/td>\n2,544.7<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n6.75 %<\/td>\n6.92 %<\/td>\n55,774<\/td>\n12.59<\/td>\n33<\/td>\n0.2765 %<\/td>\n2,774.9<\/td>\n<\/tr>\n
FixedReset Disc<\/td>\n5.82 %<\/td>\n7.98 %<\/td>\n122,340<\/td>\n11.64<\/td>\n60<\/td>\n-0.2242 %<\/td>\n2,225.4<\/td>\n<\/tr>\n
Insurance Straight<\/td>\n6.58 %<\/td>\n6.78 %<\/td>\n70,941<\/td>\n12.90<\/td>\n19<\/td>\n-0.0223 %<\/td>\n2,750.1<\/td>\n<\/tr>\n
FloatingReset<\/td>\n10.67 %<\/td>\n10.72 %<\/td>\n37,494<\/td>\n8.88<\/td>\n3<\/td>\n0.1331 %<\/td>\n2,479.3<\/td>\n<\/tr>\n
FixedReset Prem<\/td>\n6.97 %<\/td>\n6.96 %<\/td>\n160,978<\/td>\n3.41<\/td>\n1<\/td>\n-0.3951 %<\/td>\n2,512.4<\/td>\n<\/tr>\n
FixedReset Bank Non<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.2242 %<\/td>\n2,274.9<\/td>\n<\/tr>\n
FixedReset Ins Non<\/td>\n5.68 %<\/td>\n7.53 %<\/td>\n88,224<\/td>\n12.16<\/td>\n14<\/td>\n0.0077 %<\/td>\n2,503.6<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
TD.PF.A<\/td>\nFixedReset Disc<\/td>\n-3.92 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 18.40
\nEvaluated at bid price : 18.40
\nBid-YTW : 7.89 %<\/td>\n<\/tr>\n
BN.PF.H<\/td>\nFixedReset Disc<\/td>\n-2.77 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 19.98
\nEvaluated at bid price : 19.98
\nBid-YTW : 9.30 %<\/td>\n<\/tr>\n
PWF.PF.A<\/td>\nPerpetual-Discount<\/td>\n-2.28 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 16.71
\nEvaluated at bid price : 16.71
\nBid-YTW : 6.84 %<\/td>\n<\/tr>\n
GWO.PR.Y<\/td>\nInsurance Straight<\/td>\n-1.87 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 16.78
\nEvaluated at bid price : 16.78
\nBid-YTW : 6.73 %<\/td>\n<\/tr>\n
PWF.PR.P<\/td>\nFixedReset Disc<\/td>\n-1.75 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 12.95
\nEvaluated at bid price : 12.95
\nBid-YTW : 9.13 %<\/td>\n<\/tr>\n
FTS.PR.M<\/td>\nFixedReset Disc<\/td>\n-1.71 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 17.20
\nEvaluated at bid price : 17.20
\nBid-YTW : 8.73 %<\/td>\n<\/tr>\n
POW.PR.D<\/td>\nPerpetual-Discount<\/td>\n-1.60 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 18.50
\nEvaluated at bid price : 18.50
\nBid-YTW : 6.89 %<\/td>\n<\/tr>\n
BN.PF.I<\/td>\nFixedReset Disc<\/td>\n-1.43 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 19.30
\nEvaluated at bid price : 19.30
\nBid-YTW : 9.14 %<\/td>\n<\/tr>\n
TD.PF.B<\/td>\nFixedReset Disc<\/td>\n-1.42 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 19.45
\nEvaluated at bid price : 19.45
\nBid-YTW : 7.56 %<\/td>\n<\/tr>\n
BN.PF.G<\/td>\nFixedReset Disc<\/td>\n-1.35 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 16.05
\nEvaluated at bid price : 16.05
\nBid-YTW : 9.62 %<\/td>\n<\/tr>\n
MFC.PR.F<\/td>\nFixedReset Ins Non<\/td>\n-1.26 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 14.13
\nEvaluated at bid price : 14.13
\nBid-YTW : 8.06 %<\/td>\n<\/tr>\n
FFH.PR.D<\/td>\nFloatingReset<\/td>\n-1.14 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 19.97
\nEvaluated at bid price : 19.97
\nBid-YTW : 10.69 %<\/td>\n<\/tr>\n
MFC.PR.C<\/td>\nInsurance Straight<\/td>\n-1.08 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 18.30
\nEvaluated at bid price : 18.30
\nBid-YTW : 6.18 %<\/td>\n<\/tr>\n
FTS.PR.F<\/td>\nPerpetual-Discount<\/td>\n-1.06 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 18.65
\nEvaluated at bid price : 18.65
\nBid-YTW : 6.63 %<\/td>\n<\/tr>\n
BN.PR.X<\/td>\nFixedReset Disc<\/td>\n1.05 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 14.50
\nEvaluated at bid price : 14.50
\nBid-YTW : 9.18 %<\/td>\n<\/tr>\n
BIP.PR.B<\/td>\nFixedReset Disc<\/td>\n1.19 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 21.25
\nEvaluated at bid price : 21.25
\nBid-YTW : 9.12 %<\/td>\n<\/tr>\n
IFC.PR.C<\/td>\nFixedReset Ins Non<\/td>\n1.22 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 18.22
\nEvaluated at bid price : 18.22
\nBid-YTW : 7.96 %<\/td>\n<\/tr>\n
FFH.PR.I<\/td>\nFixedReset Disc<\/td>\n1.27 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 15.95
\nEvaluated at bid price : 15.95
\nBid-YTW : 9.40 %<\/td>\n<\/tr>\n
GWO.PR.M<\/td>\nInsurance Straight<\/td>\n1.32 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 21.43
\nEvaluated at bid price : 21.43
\nBid-YTW : 6.79 %<\/td>\n<\/tr>\n
MFC.PR.N<\/td>\nFixedReset Ins Non<\/td>\n1.44 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 18.26
\nEvaluated at bid price : 18.26
\nBid-YTW : 7.87 %<\/td>\n<\/tr>\n
GWO.PR.L<\/td>\nInsurance Straight<\/td>\n1.52 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 20.75
\nEvaluated at bid price : 20.75
\nBid-YTW : 6.83 %<\/td>\n<\/tr>\n
RY.PR.N<\/td>\nPerpetual-Discount<\/td>\n3.29 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 21.68
\nEvaluated at bid price : 22.00
\nBid-YTW : 5.60 %<\/td>\n<\/tr>\n
RY.PR.O<\/td>\nPerpetual-Discount<\/td>\n6.34 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 21.49
\nEvaluated at bid price : 21.80
\nBid-YTW : 5.65 %<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nShares
\nTraded<\/td>\n		Notes<\/td>\n<\/tr>\n
TD.PF.I<\/td>\nFixedReset Disc<\/td>\n202,900<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 22.93
\nEvaluated at bid price : 24.15
\nBid-YTW : 6.82 %<\/td>\n<\/tr>\n
BNS.PR.I<\/td>\nFixedReset Disc<\/td>\n167,848<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 22.39
\nEvaluated at bid price : 23.22
\nBid-YTW : 6.56 %<\/td>\n<\/tr>\n
NA.PR.C<\/td>\nFixedReset Prem<\/td>\n151,346<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2027-11-15
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.21
\nBid-YTW : 6.96 %<\/td>\n<\/tr>\n
NA.PR.G<\/td>\nFixedReset Disc<\/td>\n143,550<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 22.93
\nEvaluated at bid price : 24.37
\nBid-YTW : 6.55 %<\/td>\n<\/tr>\n
CM.PR.T<\/td>\nFixedReset Disc<\/td>\n122,000<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 22.92
\nEvaluated at bid price : 23.75
\nBid-YTW : 7.29 %<\/td>\n<\/tr>\n
CM.PR.S<\/td>\nFixedReset Disc<\/td>\n112,808<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 20.85
\nEvaluated at bid price : 20.85
\nBid-YTW : 7.32 %<\/td>\n<\/tr>\n
There were 34 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\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.F<\/td>\nFixedReset Ins Non<\/td>\nQuote: 14.13 – 23.79
\nSpot Rate : 9.6600
\nAverage : 5.5996<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 14.13
\nEvaluated at bid price : 14.13
\nBid-YTW : 8.06 %<\/td>\n<\/tr>\n

BN.PR.B<\/td>\nFloater<\/td>\nQuote: 10.76 – 12.80
\nSpot Rate : 2.0400
\nAverage : 1.3310<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 10.76
\nEvaluated at bid price : 10.76
\nBid-YTW : 12.15 %<\/td>\n<\/tr>\n

GWO.PR.Y<\/td>\nInsurance Straight<\/td>\nQuote: 16.78 – 18.25
\nSpot Rate : 1.4700
\nAverage : 0.9633<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 16.78
\nEvaluated at bid price : 16.78
\nBid-YTW : 6.73 %<\/td>\n<\/tr>\n

IFC.PR.F<\/td>\nInsurance Straight<\/td>\nQuote: 20.00 – 21.60
\nSpot Rate : 1.6000
\nAverage : 1.2153<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 20.00
\nEvaluated at bid price : 20.00
\nBid-YTW : 6.78 %<\/td>\n<\/tr>\n

MIC.PR.A<\/td>\nPerpetual-Discount<\/td>\nQuote: 16.77 – 17.75
\nSpot Rate : 0.9800
\nAverage : 0.6338<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 16.77
\nEvaluated at bid price : 16.77
\nBid-YTW : 8.27 %<\/td>\n<\/tr>\n

TD.PF.A<\/td>\nFixedReset Disc<\/td>\nQuote: 18.40 – 19.16
\nSpot Rate : 0.7600
\nAverage : 0.5255<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2053-12-06
\nMaturity Price : 18.40
\nEvaluated at bid price : 18.40
\nBid-YTW : 7.89 %<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The BoC stood pat on the policy rate: The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5\u00bc% and the deposit rate at 5%. 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-46135","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/46135","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=46135"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/46135\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=46135"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=46135"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=46135"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}