- Joined
- Feb 6, 2008
- Messages
- 32
While typically CIBC World Markets has the leading research on debt capital markets, Scotia Capital has been hiring some top debt market analysts and now release a really useful weekly report. I have included only the opening part below as I can`t attach the PDF file that has great information, charts, predictions and some key indicators to watch for in the time ahead. If anyone would like to get a copy of the report then please PM me with your email and I would be happy to send a copy. Wishing everyone the best!Sincerely, Calum W.M. Ross,[sub] CMP, PFP, MBA[/sub]Senior Vice President, Mortgage Advisor
The Mortgage Centre - Mortgage Professionals Inc.
Build wealth with our comprehensive client personal finance library at: www.CalumRoss.com
Phone. 416.410.9905 Fax . 416.410.9491
Putting our clients first has made us first. Our team was ranked #1 in Canada 2004, 2005 and 2006 - #1 in Toronto since 2002.
Fixed Income Research
Canadian Debt Strategy
March 14, 2008
Week in Review:
[*]Liquidity problems and the central bank response continued to dominate fixed income markets. The Fed introduced a new Term Securities Lending Facility, in which it will lend liquid Treasury securities in exchange for less liquid agency and high-rated mortgage securities. This follows the increase in the TAF to $100 bn, and the new $100 bn term repo facility announced March 7. The ECB announced it would participate in providing term US$ funding again, something it had stopped doing last month. The BoC simultaneously announced it will provide $4 bn in term funds.[*]Liquidity concerns intensified later in the week despite these efforts, in particular on the news Friday that Bear, Stearns had to arrange emergency funding via the NY Fed and JP Morgan.Markets were volatile. The US 2-year yield backed up some 25 bps on Tuesday, as the latest set of central bank liquidity measures took off some of the safe-haven bid, and caused investors to scale back the more aggressive expectations for Fed easing. From a high of 1.74% early in the week, the US 2-year yield rallied toward the low 1.40s by Friday. Fed funds futures had priced out any chance of a 75 bp cut early in the week, but were pricing almost 50% chance of a 100 bp cut by the end of the week.Notwithstanding the ongoing liquidity problems, there were signs that the Fed`s new measures were having some effect, as swap spreads and mortgage spreads came in some 20 bps or more. Similar spreads in Canada, however, actually widened.BoC Governor Carney, in a separate speech, reiterated the theme that the Canadian economy cannot decouple from the US, which is consistent with our expectation for further rate cuts in Canada. The 10year Canada yield declined 2 bps over the week. The 2s/10s curve flattened from 104 to 91 bps midweek, but had steepened back to 103 bps by Friday when we went to press.What`s Ahead:
The Mortgage Centre - Mortgage Professionals Inc.
Build wealth with our comprehensive client personal finance library at: www.CalumRoss.com
Phone. 416.410.9905 Fax . 416.410.9491
Putting our clients first has made us first. Our team was ranked #1 in Canada 2004, 2005 and 2006 - #1 in Toronto since 2002.
Fixed Income Research
Canadian Debt Strategy
March 14, 2008
Week in Review:
[*]Liquidity problems and the central bank response continued to dominate fixed income markets. The Fed introduced a new Term Securities Lending Facility, in which it will lend liquid Treasury securities in exchange for less liquid agency and high-rated mortgage securities. This follows the increase in the TAF to $100 bn, and the new $100 bn term repo facility announced March 7. The ECB announced it would participate in providing term US$ funding again, something it had stopped doing last month. The BoC simultaneously announced it will provide $4 bn in term funds.[*]Liquidity concerns intensified later in the week despite these efforts, in particular on the news Friday that Bear, Stearns had to arrange emergency funding via the NY Fed and JP Morgan.Markets were volatile. The US 2-year yield backed up some 25 bps on Tuesday, as the latest set of central bank liquidity measures took off some of the safe-haven bid, and caused investors to scale back the more aggressive expectations for Fed easing. From a high of 1.74% early in the week, the US 2-year yield rallied toward the low 1.40s by Friday. Fed funds futures had priced out any chance of a 75 bp cut early in the week, but were pricing almost 50% chance of a 100 bp cut by the end of the week.Notwithstanding the ongoing liquidity problems, there were signs that the Fed`s new measures were having some effect, as swap spreads and mortgage spreads came in some 20 bps or more. Similar spreads in Canada, however, actually widened.BoC Governor Carney, in a separate speech, reiterated the theme that the Canadian economy cannot decouple from the US, which is consistent with our expectation for further rate cuts in Canada. The 10year Canada yield declined 2 bps over the week. The 2s/10s curve flattened from 104 to 91 bps midweek, but had steepened back to 103 bps by Friday when we went to press.What`s Ahead:
- Scotia Economics forecasts that the Fed will cut the funds target from 3.0% to 2.25% on March 18.
- February Canadian inflation numbers will likely moderate once again, providing the Bank of Canada with further room to ease monetary policy.North American Markets will be closed on Friday for Easter, with an early close for fixed income markets on Thursday.