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Scotiabank Says Canada Strong Fund Could Boost Domestic Investment

The federal government is weighing a Canada Strong Fund that could give households the option to invest alongside Ottawa in domestic growth projects, said Scotiabank Economics on Tuesday.The aim is to boost participation in nation-building investments and steer more household savings toward national priorities, wrote the bank in a note."The idea is novel," wrote Rebekah Young, vice-president, economic policy, as it would allow "Canadians to share more directly in the upside of the domestic growth agenda."However, the key question is whether it addresses a genuine gap in capital allocation, rather than simply offering a new retail investment option, added Young in the note.Prime Minister Mark Carney launched the fund in April as Canada's first sovereign wealth fund, with about $25 billion in initial government funding directed toward infrastructure, energy, critical minerals and other priority sectors.As the global landscape becomes more fragmented, investment flows may not naturally align with strategic domestic priorities, stated Scotiabank.Despite sizable household wealth, a large share remains tied to residential property, while investable savings are often directed outside Canada because of limited domestic investment choices, according to the bank.A retail offering may encourage greater investment in Canadian growth assets, but its success would depend on striking the right balance between accessibility and risk management, wrote Young.Its success will ultimately depend on whether it expands investment opportunities while avoiding excessive taxpayer exposure, concluded the bank.

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Treasury46m ago

Bank of Canada Governor Warns Growing Global Imbalances Could Threaten Financial Stability

Global imbalances are once more exerting pressure via trade, capital flows and financial markets, prompting questions about whether they will be managed ahead of time or corrected abruptly, said Bank of Canada Governor TIff Macklem on Tuesday.Market and policy consensus is growing that domestic policy distortions in major economies are driving these imbalances, said Governor Macklem in a speech in France made available by the central bank.That correction will hinge on China consuming more, the U.S. saving more and Europe investing more. Some progress is underway, but a coordinated and sustained effort will be needed for noticeable improvement, stated Macklem.As to a solution to the problem, "I see three priorities: openness, investability and transparency," said the head of Canada's central bank at a Chambre de Commerce France-Canada event in Paris.First, openness is about keeping global trade and investment channels accessible so resources are directed to their best use, rather than splintering into protectionist blocs that weaken efficiency, pointed out Macklem.Second, investability is about increasing the appeal of non-U.S. markets for global capital by supporting deeper capital markets, robust institutions, fewer regulatory barriers and improved investment fundamentals.Third, greater transparency is required to track emerging risks in fast-evolving financial systems, especially in cross-border capital flows and non-bank intermediaries, enabling earlier detection of weaknesses. Macklem was especially keen on risks tied to non-bank intermediaries."One consequence of higher standards for banks is that riskier activities have migrated to non-bank financial intermediaries that sit outside the more regulated banking sector," noted the governor.Ultimately, maintaining resilience requires coordinated action, as in the absence of that, imbalances will continue to grow and eventually unwind in a disorderly manner, concluded Macklem.

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Treasury1h ago

Municipal Bond Offerings Face Exposure to Wildfire, Flood Risks

Multiple municipal bond offerings this week have a high exposure to climate risk, specifically high wildfire and flood risk scores, according to ICE Climate Data.A $66 million offering from Dublin Unified School District, California, records a wildfire risk score of 2.9 out of 5.0, ICE reported. Locations with a component physical climate risk score, which includes flood, wildfire and hurricane, of 2.0 or higher out of 5.0 indicate high risk due to hurricane, flooding or wildfire events.A $7 million bond deal from Ship Bottom, New Jersey, has a flood risk score of 5.0 out of 5.0 on ICE's scale, while an $8 million tranche from Western Beaver County School District, Pennsylvania, records a flood risk score of 3.7.A separate $23 million offering from Otego-Unadilla Central School District, New York, records an acute physical risk score of 3.2, and a $28 million deal from Boise, Idaho, has a combined physical risk Score of 2.7, due to their proximity to weather-related events, according to ICE Climate Data.This content is created byand includes certain data sourced from ICE Climate Data ("ICE"). Views ofdo not necessarily represent the views of ICE. ICE is not a nationally registered statistical rating organization, nor should this commentary be construed to constitute an assessment of the creditworthiness of any company or financial instrument or as providing investment advice. Climate analytics available from ICE are meant to be generally indicative of overall feature sets but should not be considered an analyst's opinion of the underlying investability of a particular location or security.The ICE Climate Risk Score is a singular, 0.0-5.0 assessment score that blends all the ICE Spatial Intelligence Platform's climate hazard models together into one rigorous, relative measure of total property risk from physical climate hazards to a given location or set of locations related to the investment. To learn more about the ICE Climate Risk Data, visit: ICE Sustainable Finance Data (https://www.ice.com/data-services/sustainable-finance-data/disclaimer)

Treasury2h ago

Energy Spike Shows Little Pass-Through to Canada Inflation, Easing Central Bank Concerns, BMO Says

Signs that higher energy prices are feeding through into broader inflations measures are limited so far, which is "good news" for policymakers who are focused on growth, Bank of Montreal Capital Markets said on Monday.With energy prices likely to soften in the June consumer price index report, pressures in the near term should ease further, wrote BMO Senior Economist Robert Kavcic in a note after the May data release.Beneath the "hot" 3.2% year-on-year headline print for May, underlying Canadian inflation measures remain subdued, said Kavcic. The BoC's four closely watched core inflation measures were still contained in May, averaging near 2%, BMO said.Even with some stronger monthly prints, the underlying trend has remained soft enough to hold the three-month annualized rate near 1.8%, pointing to no meaningful build-up in inflation pressures, the bank added.For the BoC, "this is good news" as it has one eye on the economy, and the other eye on any evidence of broader pass-through from higher energy prices into inflation, said the BMO economist.

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Treasury2h ago

Rosenberg Says May Inflation Data Offer Little Support for Bank of Canada Hawks

Rosenberg Research said Tuesday that Canada's May inflation data offered little support for a more hawkish Bank of Canada stance, noting that only 38.6% of the core consumer price index basket is running above the central bank's 2% target.That compares with nearly 80% at the peak of the inflation cycle and a long-term average of 49%, according to Rosenberg Research.Some market players noted concern over a nearly 0.3% monthly rise in Canada's May core inflation, which excludes food and energy, and which posted the highest reading this year, pointed out Rosenberg. However, a broader measure that strips out energy-sensitive components, such as airfares and travel services, points to a much softer gain of around 0.15% on the month, with the annual rate just less than 1.6%."Not much to really be concerned about because there is no evidence of the energy shock broadening out into the pricing system, generally speaking," according to Rosenberg.

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Treasury3h ago

Canadian Dollar Weakens as Yield Spread Widens, Bank of Canada Seen on Hold, Says SocGen

The Canadian dollar weakened versus its US counterpart, driven by widening interest rate differentials, Societe Generale Economics said in a note on Tuesday.A larger gap between two-year U.S. Treasury and Canadian government bond yields pushed the U.S. dollar higher against the Canadian currency, with the exchange rate up to a 14-month high of almost $1.42, wrote the bank in its note.Markets showed little reaction to Canada's higher-than-expected May consumer price index print that was released on Monday, which saw annual headline inflation at 3.2% and core inflation remaining "well behaved" at 1.6%, said SocGen.The Bank of Canada is seen keeping rates on hold for the "foreseeable future," according to SocGen.

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Treasury4h ago

Lower Fuel Prices Offer Hope for Canadian Consumer Spending Revival in Second Half, BMO Says

Energy prices have fallen sharply in June and could stay lower if the Middle East peace deal holds, potentially supporting a stronger rebound in Canadian consumer spending in the second half of the year, said Bank of Montreal Capital Markets Economics."The good news is that energy prices have pulled back sharply in June, and could continue to normalize," the bank wrote in a note published on Monday.Canada's retail sales data for April pointed to elevated energy prices as a factor squeezing household income, prompting reduced spending on non-essential items, Senior Economist Shelly Kaushik said in the note.Canadian retail sales rose a "sizeable" 0.5% month over month in April, but the gain was largely driven by increased spending at gasoline stations as households felt the effects of rising fuel prices, Kaushik said.Once gasoline and the typically volatile auto category are removed, core sales have contracted for two consecutive months, highlighting persistent weakness in consumer spending, according to BMO.

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Treasury12h ago

Market Chatter: DBS Bank to Sell Three-Year USD Benchmark Covered Bond

Singapore-based DBS Group Holdings' (SGX:D05) subsidiary DBS Bank is planning to sell a three-year US dollar benchmark covered bond, which has a maturity date of June 29, 2029, Reuters reported Monday, citing a term sheet.The bond is expected to be settled on June 29, 2026, the report said.The bonds will be offered at a spread of 42 basis points over secured overnight financing rate (SOFR) mid-swaps, backed by a pool of Singapore residential mortgage loans, and guaranteed by Bayfront covered bonds.The notes are expected to receive ratings of Aaa from Moody's and AAA from Fitch Ratings. Joint lead managers for the offering include BMO Capital Markets, HSBC (HKG:0005), RBC Capital Markets, Standard Chartered PLC (HKG:2888) subsidiary Standard Chartered Bank, and TD Securities.DBS Bank did not immediately reply to' request for comment.Shares of DBS Group Holdings rose nearly 1% in recent trade, while those of Standard Chartered PLC added over 1%.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

HKG:0005HKG:2888SGX:D05

Treasury17h ago

Adaptive Biotechnologies Issues $345 Million Convertible Notes

Adaptive Biotechnologies (ADPT) said late Monday it has issued $345 million of 0% convertible senior notes due 2031, including the full exercise of an over-allotment option.Net proceeds were used among others for capped call transactions, share repurchase, and for the repayment of the OrbiMed purchase agreement, the company said in a filing.

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Treasury20h ago

US Treasury Closing Levels

3:00 Monday vs 3:00 Thursday2yr 99-18 vs 99-23; 4.234% vs 4.166%5yr 99-08 vs 99-18+; 4.288% vs 4.218%10yr 98-29+ vs 99-13+; 4.509% vs 4.445%30yr 100-25+ vs 101-18+; 4.946% vs 4.898%2/10 27.241 bps vs 27.719 bps5/30 65.701 bps vs 67.761 bps

Treasury22h ago

National Bank Cuts Its Canada's GDP Growth Forecast to 0.7% for 2026 on a Weak Q1

The weaker first-quarter reading for Canadian gross domestic product (GDP), led National Bank of Canada Capital Markets to lower its 2026 growth forecast to 0.7% from 1.0%.The new estimate is based on the United States-Mexico-Canada, or USMCA, trade agreement being renewed, although trade uncertainty remains the main risk to the outlook, the bank wrote in a note published on Friday.Canadian GDP shrank by 0.1% annualized in the first quarter, following a 1.0% drop in the previous quarter, putting the economy in a technical recession."We do not believe that the recession label is warranted," economists Matthieu Arseneau, Alexandra Ducharme and Daren King noted..The Canadian economy has softened over the last two quarters and still appears to be operating below potential, with wage growth cooling and stable core inflation, added National Bank.

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Treasury23h ago

Bank of Canada Likely to Look Past Energy-Led Inflation Surge, Says National Bank

Higher oil prices have lifted the top-line inflation number, but the underlying trend remains contained, reinforcing expectations that the Bank of Canada will stay on hold, National Bank of Canada Capital Markets said.The consumer price index (CPI) rose to 3.2% year over year in May from April's 2.8%, said Statistics Canada on Monday.May's CPI is the highest rate since September 2023, due to soaring gasoline prices, which rose 33% year over year as a result of the closure of the Strait of Hormuz, noted National Bank. However, excluding energy, prices accelerated to 2.1% annually from 1.8%, as the food basket posted a price rise of about 4.3%, well above the overall basket."Despite the fact that inflation came in higher than expected in May, we are not overly concerned about the inflation situation in Canada," National Bank economists Matthieu Arseneau and Alexandra Ducharme wrote.Stripping out food and energy, inflation remained well contained at 1.6% year over year in May, compared with 1.5% a month earlier, the two economists added, emphasizing that core inflation remains "generally contained".Energy-driven inflation is unlikely to spread significantly across the economy, especially as oil market concerns ease. With trade frictions with the United States and geopolitical uncertainties persisting, there is little indication that interest rates are too low, according to National Bank."Overall, current conditions continue to support a patient approach from the Bank of Canada," the pair wrote.

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Treasury23h ago

Bank of Canada's Mortgage Warning Focuses on Refinancing Rather Than Renewals, Says TD

The Bank of Canada's Financial Stability Report household analysis has sparked attention, with projections suggesting nearly 10% of Toronto-area borrowers renewing next year may struggle to refinance, said TD Economics."The key nuance that might be missed by a casual reader is that renewing a mortgage and refinancing a mortgage are not the same thing," wrote economist Maria Solovieva in a note published on Monday.A mortgage renewal typically lets borrowers roll their existing loan into a new term with the same lender without requalifying under the stress test, Solovieva pointed out. In contrast, refinancing entails requalification and remains constrained by income and loan-to-value requirements.The BoC's analysis focuses on refinancing constraints tied to reduced home equity, not on borrowers' ability to renew their mortgages, she added.The distinction matters because the risks are largely confined to a narrow segment of borrowers renewing in 2027, said TD. These households tend to have high loan balances relative to home values, elevated debt-service costs, and little room to adjust repayment schedules. Many entered the Toronto and Vancouver housing markets near the top of the housing cycle.The outlook for consumers remains broadly reassuring, noted the bank. Most of the mortgage renewal adjustment is now behind Canada, as lower interest rates are easing debt-servicing costs and acute financial stress is limited to a relatively small group of households.

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Treasury1d ago

Bonds Steady After Canada Inflation Accelerations; TD Sees Bank of Rates Unchanged

Bond yields were steady to slightly higher after Canadian inflation accelerated on Monday, while TD Economics said the country's central bank is likely to remain on the sidelines for some time."Apart from energy costs and some emerging tech price pressures inflation remains very well behaved in Canada, as a relatively soft demand backdrop leans against sellers raising prices," wrote TD Senior Economist Leslie Preston in a note. "We expect this to keep the Bank of Canada on the sidelines for quite some time."Headline inflation climbed to 3.2% year-over-year in May from 2.8% in April, Statistics Canada data showed. The annual headline inflation exceeded expectations and the increase was driven largely by higher gasoline prices, according to TD Economics.Underlying inflation remained stable, with the Bank of Canada's preferred core measures averaging annually 2.1%, which was unchanged from the prior month, Preston said.With oil prices having declined sharply in recent weeks following a preliminary U.S.-Iran agreement for an end to the conflict between the two, gasoline prices have also eased. As a result, TD estimates May to represent the peak in headline inflation for the year.Yields on Canadian 5-year bonds rose 1.4 basis points to 3.06% while 10-year notes were less than 1 point higher at 3.4% recently.

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Treasury1d ago

Desjardins Expects BoC to Keep Rates Unchanged Despite Higher CPI

The Canadian consumer price index surged in May, though core measures remained "tame", allowing for the Bank of Canada to keep rates unchanged this year, said Desjardins Securities after Monday's CPI data.CPI increased 3.2% year over year and 1.0% on a monthly, non-seasonally adjusted basis, according to Statistics Canada.Higher gasoline and food prices drove most of the increase, said Desjardins in the note, adding that, excluding food and energy, prices rose 0.26% month over month, leaving the annual rate at 1.6% for May.The BoC's preferred measures of underlying inflation were broadly consistent with its 2% target, pointed out Desjardins. Core median and trimmed mean CPI increased 0.18% and 0.23%, respectively, leaving their average annual rate at 2.05% in May."Canadian central bankers shouldn't get too fussed about the acceleration in total inflation," according to Desjardins, as underlying inflation stays around the BoC's target. In addition, falling oil prices are beginning to offset the earlier spike in gasoline and jet fuel prices.

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Treasury1d ago

Canada Inflation Likely Peaked in May, Allowing Central Bank to Hold Rate This Year, CIBC Says

Canadian inflation picked up again in May, but with oil and gasoline prices down from earlier highs, the latest reading is likely to mark the peak giving the central bank space to hold rates this year, CIBC Economics said after Monday's consumer price index data.CPI rose 3.2% year-over-year, and was up 1% on a monthly basis and 0.5% on a monthly, seasonally adjusted basis, Statistics Canada said. The headline reading was "a couple of ticks" above the consensus, CIBC said."Once again, gasoline was the main source of inflationary pressure, and excluding that one area the year-over-year rate of CPI would have been a much more modest 2.2%," CIBC's senior economist, Andrew Grantham, said in the note.However, inflation excluding gasoline was stronger than the previous month. Some of the increase likely reflects pass-through from earlier oil price increases, with travel and air transport both returning to positive year-over-year growth, added the bank.Given the low starting point for core inflation, the Bank of Canada is expected to look through near-term gains and keep rates on hold for the rest of the year, according to CIBC.

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Treasury1d ago

Former Fed Chair Alan Greenspan Dies at Age 100

Treasury1d ago

Canada's CPI Rises More Than Expected in May on Higher Gasoline Prices

Canada's consumer price index (CPI) accelerated to 3.2% year over year in May, exceeding expectations, as higher energy prices contributed to inflation, Statistics Canada said Monday."Higher prices for gasoline continued to drive the acceleration in the headline CPI in May," writes Statistics Canada in a statement, adding that excluding gasoline, CPI would be at 2.2% year over year.Energy and commodity prices have surged following the United States military attacks against Iran starting at the end of February and the subsequent limits on the transit of vessels in the key Strait of Hormuz.May's CPI was stronger than the 3.0% year-over-year consensus figure provided by Scotiabank Economics before the release of the data.Prices for food, such as fresh fruit and vegetables, travel tours and air transportation accelerated, while housing remained a drag, noted StatsCan.Shelter inflation eased slightly in May, with prices rising 1.7% year over year following a 1.8% increase in April. The homeowners' replacement cost index fell 2.5%, extending its streak of annual declines to 13 consecutive months, while other owned accommodation expenses, including real estate commissions, dropped 2.1% after falling 2.7% in April.However, on a year-over-year basis, price growth was unchanged for durable goods, at 1.9% in both April and May.

S&P/TSX CompositeS&P/TSX Composite$CXY

Treasury1d ago

Canada's May CPI at 1.0% M/M on a Non-Seasonally Adjusted Basis, 0.5% M/M Seasonally Adjusted

S&P/TSX CompositeS&P/TSX Composite$CXY

Treasury1d ago

Canada's CPI Excluding Gasoline at 2.2% Y/Y in May

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Treasury1h ago