Why the rate cut may fuel the housing bubble in Canada
The Bank of Canada cut its key interest rate. Although the rate cut intends to boost the economy, it’s also fueling the housing bubble.
Investment-Grade Bond Funds Saw Inflows Last Week
Flows into investment-grade bond funds were positive last week. Investment-grade bond funds saw net inflows of $907.1 million during the week ending July 6.
Nordstrom Completes Sale of Credit Card Portfolio to TD Bank
On October 1, Nordstrom (JWN) announced the completion of the sale of its credit card portfolio to Toronto-Dominion Bank (TD), also known as TD Bank.
Why Is Nordstrom Selling Its Profitable Credit Card Portfolio?
Running a credit card division locks up some of a retailer’s capital and resources. Nordstrom’s credit card portfolio sale will let it focus on its core retail business.
The widening spread in the Canadian prime and key interest rates
The “Big Six Banks” in Canada have only reduced their prime rates by 15 basis points. So the spread between the prime and key interest rates is now 0.1%.
Visa Inc Led the High-Grade Bond Market Last Week
Visa Inc (V) issued A1/A+ rated high-grade bonds worth $16.0 billion via six parts. This included $1.75 billion in 1.20% two-year notes at a spread of 30 bps.
Canada: 5th-largest oil producer, exposed to concentration risk
Canada is the world’s fifth-largest oil producer. It produces about 6% of global energy supplies and ranks third in the world in proven oil reserves.
How Canadian Imperial Bank Takes Advantage of Switching Costs
Canadian Imperial Bank of Commerce (CM CN) is the fifth largest bank in Canada and boasts 11 million clients.
Rockwell Collins Acquires B/E Aerospace in a Deal-Making Weekend
On October 23, Rockwell Collins (COL) announced that it intends to acquire B/E Aerospace (BEAV) for a total consideration of $8.3 billion. Within Rockwell Collins, B/E Aerospace will operate as its new Aircraft Interior Systems segment.
UBS Group Funding Issued the Most High-Grade Bonds Last Week
UBS Group Funding (Jersey), a subsidiary of UBS Group AG (UBS), issued BBB+ rated high-grade bonds worth $5.0 billion via three parts on March 29.
Investment-Grade Bond Funds Saw Record Inflows Last Week
Investment-grade bond funds saw net inflows of $2.2 billion during the week, the highest since February 25, 2015.
Anheuser-Busch Had Record Issuances in High-Grade Bonds Last Week
Anheuser-Busch InBev (BUD) issued $46.0 billion in high-grade bonds rated A2/A- rated on January 13. This was the second largest high-grade bond issuance on record.
$62.47 Billion in Investment-Grade Corporate Bonds Issued Last Week
Investment-grade corporate bonds worth $62.47 billion were issued in the primary market in the week ended January 15, 2016. Investment-grade corporate bonds worth $29.68 billion were issued in the previous week.
Investment-Grade Bond Funds Witnessed Record Outflows Last Week
Flows into investment-grade bond funds were negative for the week ended December 16. The investment-grade bond funds saw record net outflows of $5.1 billion during the week.
No Investment-Grade Corporate Bond Issuance due to Rate Hike
There was no issuance of investment-grade corporate bonds in the primary market in the week to December 18, 2015.
High-Grade Corporate Issuers Have Returned to the Market
When the rate does rise, it will mean an increasing interest rate environment, where corporate issuers may be required to pay more interest to creditors.
Spring could warm up home prices in Canada even more
Rising home prices lead to households taking on more debt to fund the purchase. Increased bank lending to fund the purchases drives real estate prices up more.
3 key factors affecting Canadian currency depreciation
The availability of easy money leads to currency depreciation, which benefits exporters, but is counterproductive for importers.
Economic essentials: The key interest rate and the prime rate
The key interest rate and the prime rate are central to the Canadian financial system. They key interest drives lending rates at the big banks.
Could Canada’s inverted sovereign yield curve mean recession?
Canada’s inverted sovereign yield curve could be an indication of an upcoming recession. US yields exhibited similar curves prior to the 2008 recession.
Key challenges facing the Canadian economy
One of the challenges facing the Canadian economy is a lack diversification. More than 70% of the TSX Composite Index is made up of only three sectors.