Canada is gearing up for a federal election on October 21. The consensus holds that the Liberal Party of Prime Minister Justin Trudeau will remain in power with a minority government, or possibly in a coalition with the left-wing…
The price differential at which Canadian heavy-sour crude trades to the North American benchmark WTI will be pushed to -$20/bbl into 1Q20, as transportation constraints continue to slow the marginal barrel’s egress from Alberta.…
Highlights Currency markets continue to fight a tug-of-war between deteriorating global growth and easing global financial conditions. Such an environment is typically fertile ground for a dollar bull market, yet the trade-weighted…
Canadian corporate credit spreads have been remarkably stable since the 2008 Global Financial Crisis. The overall index option-adjusted spread (OAS) has stayed range-bound between 100 and 200bps. Total and excess (duration-…
The bulk of outstanding Canadian corporate debt is rated investment grade (IG), but this represents only 5% of the global IG market. However, the total market capitalization of Canadian corporate bonds is 30% of Canada’s…
Highlights Duration: Global manufacturing growth will rebound near the end of this year. Much like in 2016, this will result in higher global bond yields on a 12-month horizon. Investors should keep portfolio duration close to…
Highlights So What? Key geopolitical risks remain unresolved and most of the improvements are transitory. Maintain a cautious tactical stance toward risk assets. Why? U.S.-China relations remain the preeminent geopolitical risk to…
The EUR/CAD has reached an important technical level, and either a major breakdown or a powerful bounce will follow. With Canadian data firing on all cylinders and the euro area in the depths of a manufacturing slowdown, the…