Canadian retails sales jumped in October

Posted: Thursday, December 21, 2017 - 09:04 EST

Canadian retail sales jumped in October increasing by 1.5%, which was higher than expectations of 0.3%.  The strong number was largely due to an increase in auto sales, which indicates that consumers are still positive about the economy and willing to purchase new cars.  Excluding gasoline and vehicle sales, receipts increased over the month at 1.1% with sales up across every province in Canada.  Canadian headline inflation for November moved higher to 2.1% from 1.4% in the previous month.  The rise was primarily driven by gasoline prices that were up 7.4% over the month.  The average of the three core CPI measures, that excludes energy and food inflation, stood at 1.7% which was the highest level in more than a year.  However, during the most recent BOC statement, the central bank noted that faster than expected inflation is due to temporary factors.

Late yesterday, Moody’s downgraded Enbridge Inc. by one notch to Baa3 with the outlook at stable.  Moody’s cited that the current level of leverage exceeds the threshold; however the expectation is for Enbridge Inc. to deleverage back to acceptable levels.  The rating agency also noted that there is execution risk associated with Enbridge’s stated actions to reduce the leverage ratio in 2018.  Outside of rating agency actions yesterday, passing the U.S. tax bill continued to be in focus.  Flows were generally scrappy with spreads ending the day mostly unchanged.

Equity Markets:

  Index Level % Change QTD YTD Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
S&P 500 2,679.25 -0.08% 6.83% 22.04% 2.44% 3.85% 3.82% 6.07% 3.09% 4.48%
TSX

16,159.67

0.16% 3.95%

8.57%

5.06% 5.45% 4.53% 2.41% -1.64% 3.68%

Rates:

 

Today

% Change

QTD change

YTD change

June 30  2016

Sept 30 2016

Dec 31 2016

Mar 31 2016

June 30 2017

Sept 30  2017

Canada 5 Year

1.868%

0.11% 0.12% 0.75% 0.569% 0.615% 1.150% 1.119% 1.393% 1.753%
Canada 10 Year 2.046% 0.11% -0.05% 0.33% 1.059% 0.990% 1.750% 1.625% 1.762% 2.099%
Canada 30 Year 2.279% 0.08% -0.19% -0.03% 1.714% 1.658% 2.350% 2.302% 2.148% 2.472%
30yr Generic Corporate A rated Spread 1.240% 0.00% 0.00% -0.09% 1.610% 1.530% 1.390% 1.330% 1.210% 1.240%
30yr All-in Corporate A rated Yield

3.519%

0.08% -0.19% -0.12% 3.324% 3.188% 3.740% 3.632% 3.358% 3.712%
US 10 Year 2.484% -0.01% 0.15% 0.04% 1.47% 1.60% 2.50% 2.39% 2.31% 2.33%
CDX IG 48.649 -0.884                

The information contained herein is intended for advisors for general information only and is compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made as to its accuracy. All opinions contained in the commentary and expressed by the portfolio manager are subject to change without notice and are provided in good faith without legal responsibility. All market data is sourced from Bloomberg.