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Daily Market Commentary

A big TD Bank tier 2 capital deal was priced yesterday.  $1.8 billion 10 year bonds priced at approx 120 bps over the Canadas.  The deal was upsized and still oversubscribed.  Interestingly, the ten year area of the curve remained firm despite the size of this deal - indicating a lot of sideline money coming into the deal - (the CAD$ was also stronger, so flows may have come from non-CAD$ assets)

 

 

PPI came out a few minutes ago, and while the headline has ticked down sharply, the core rate is slightly higher than expected and also mildly higher than last month.  So, once again, for economists who don't heat or cool their homes, or drive to the grocery store - prices rose more than expected.  For the rest of the world, prices actually declined -0.2%.  Bonds are down slightly after yesterday's data-free stealth rally.  Bonds ratcheted higher during the course of the day, ending the day at the highest levels of the sessions. 

 

As mentioned, the CAD$ remains strong, through this morning's numbers.  We've been flirting with the 96 cent level for some time, but so far it has provided some resistance as we've tried and failed a few times to break through it.  Don't lay your bets though - most of these "resistance" points have been anything but...  The loonie is indeed a freight train.

 



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