Market Commentary

Commercial Bond Yields

Canada Mortgage Bond

Canada Housing 12/15/17*: 1.66%

Canada Housing 06/15/18*: 1.71%

Canada Housing 12/15/22*: 2.28%

* denotes interpolated rate

Select Government of Canada Bonds

CAN 4.00 06/01/17: 1.29%

CAN 2.75 06/01/22: 1.71%

GOC Bonds are for reference purposes only

First National Floating

Insured Cost of Funds

1.20%

Bank Prime Rate

3.00%

Posted Rate

1 Year: 3.00%

2 Year: 3.14%

3 Year: 3.70%

4 Year: 4.64%

5 Year: 5.24%

Market Commentary - Courtesy of First National Financial        

The pessimism that has been ruling the markets since the U.S. election may ease a little today.  President Barack Obama is set to meet with the leader of the Republicans in an effort to avoid the fiscal cliff.  Bond yields are virtually unchanged, up just 1 bp.

Industrial production in the U.S. dropped unexpectedly in October.  Overall output fell 0.4% and the storm known as Sandy is getting the blame.  Forecasts had called for a 0.2% gain.  Capacity utilization, which measures the extent to which plants are achieving their full potential output, also decreased.  It fell to 77.8% in October from 78.2%.

Foreign investment in Canadian securities climbed in September, led by purchases of government bonds.  Non-residents picked up nearly $11 billion dollars in debt securities for the month, pushing the year’s total, so far, to almost $56 billion.  Most of that is in federal bonds.  Canadians bought $6 billion dollars in foreign securities in September – mainly U.S. equities.