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US 30-Year Treasury Yield Slips 1.4 Basis Points to 5.17%, 10-Year Rate Falls 2.6 Basis Points to 4.64% Early Wednesday

Most US Treasury Yields Drop Pre-Bell as Investors Await FOMC Minutes, Fed Speeches While Iran Peace Talks Continue

SocGen's Overnight Economic News Summary

Societe Generale in its early Wednesday economic news summary pointed out:Bond sell-off pauses, 30-year United States Treasury off 5.1985% high, 10-year off 4.68% high, German Bund dips from 3.20%. Brent consolidates at US$110/barrel. President Trump repeats his warning that military strikes will resume if Iran doesn't agree to a deal. NATO considering the possibility of helping ships sail through the Strait of Hormuz if not open by early July. China's President Xi: restarting war is even more unacceptable.G7 finance ministers to cooperate policy responses that should be temporary, targeted and fiscally responsible to protect growth, support economic security. Central banks strongly committed to maintaining price stability, monetary policy is data-dependent, closely monitoring the impact of energy/commodity prices on inflation, inflation expectations, economic activity.United Kingdom April consumer price index below forecast. Headline slows to 2.8% year over year from 3.3% in March, core dips to 2.5% year ver year, services ease to 3.2%.Day ahead: FOMC minutes, Federal Reserve speaker Barr, Nvidia results. Eurozone final CPI. Germany benchmark auction. South Africa's CPI.Nikkei -1.1%, EUR 10-year IRS -1.5bps at 3.20%, Brent crude -0.9% at US$110.3/barrel, Gold -0.9% at US$4,466/oz.

$CXY$EUR

Treasury81d ago

Granite Construction to Redeem Convertible Notes due 2028

Granite Construction (GVA) said late Tuesday that it has called all of its 3.75% convertible senior notes due 2028 for redemption on Aug. 10.The company said it will redeem the notes at par of the principal amount. It also said the notes may be converted at the election of the holder before the close of business on Aug. 6.

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Treasury81d ago

Bombardier Redeems US$750 Million in Senior Notes Due 2029

Bombardier (BBD-A.TO, BBD-B.TO) after trade Tuesday said it completed the redemption of all US$750 million of its 7.50% senior notes due in 2029.The repayment was funded through proceeds from a new debt offering along with US$250 million in cash from the company's balance sheet, it added.The redemption process is being completed through the Depository Trust Company under standard procedures, according to the statement.

$BBD-A.TO$BBD-B.TO

Treasury81d ago

Trinity Capital Prices Offering of $300 Million Notes due 2031

Trinity Capital (TRIN) said late Tuesday it has priced an underwritten public offering of $300 million of 7.0% notes due May 21, 2031.The offering is expected to close on May 21, the firm said.The company said it plans to use net proceeds to pay down a portion of its debt under the KeyBank Credit Facility.

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Treasury81d ago

ECN Capital Makes Cash Offer To Purchase Outstanding Debentures

ECN Capital after trade Tuesday said as a result of the change of control of the company it has made a cash offer to purchase, as of May 19, all of its 6.00% Senior Unsecured Debentures of the company due December 31, 2026 and 6.50% Convertible Senior Unsecured Debentures of the company due April 30, 2030.This comes after completion on April 24 of its acquisition by a newly formed acquisition vehicle controlled by an investor group led by investment funds managed by Warburg Pincus LLC and including Goodview Capital Corp.

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Treasury81d ago

Veon Unit Prices $1.4 Billion Bond Offering

Veon (VEON) said late Tuesday its Veon Midco unit has priced its offering of $700 million of 6.95% senior unsecured notes due 2031 and another $700 million of 7.45% of notes due 2033 at par of their principal amounts.The offering reflects its balance sheet optimization, it said.Net proceeds will be used to refinance its debt, including the purchase of its 3.375% senior notes due 2027, the company said.

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Treasury81d ago

US Treasury Closing Levels

3:00 Tuesday vs 3:00 Monday2yr 99-10 vs 99-11; 4.118% vs 4.088%5yr 98-00+ vs 98-06+; 4.325% vs 4.280%10yr 97-22+ vs 98-01; 4.664% vs 4.621%30yr 97-09+ vs 97-24+; 5.177% vs 5.146%2/10 54.493 bps vs 53.099 bps5/30 85.109 bps vs 86.456 bps

Treasury81d ago

Shorter End of Canada's Bond Yield Curve Is A Good Place to Hide Amid a "Troubling" Rise in Yields, Says Desjardins

Headlines blame rising global bond yields on inflation fears, but the truth is more unsettling, said Desjardins.The term premiums embedded in bond yields, which are the additional compensation investors demand to hold debt, have risen sharply, noted the bank. The last time the term premiums were this high, the sustainability of sovereign debt was in serious question.Breakeven inflation rates suggest that market participants are confident central bankers will contain price pressures, stated Desjardins. However, with rate cuts no longer in the cards, war ongoing in the Middle East, and governments finding it difficult to rein in spending, investors appear more concerned about fiscal pressures.In comparison to an oil-driven spike in inflation, that's a much more difficult problem for policymakers to solve, it pointed out.Deficits are entrenched across developed economies. While Canada's relatively stronger fiscal position has shielded the Government of Canada (GoC) bonds from some of the worst of the turmoil, the domestic market is hardly immune to these pressures, added Desjardins. Yields further out the curve are highly sensitive to developments in other markets and much of what's happened there has been the result of global spillovers.It's impossible to say whether this move has run its course. However, in the flurry of market activity, swap prices also now imply almost two full rate hikes in Canada over the remainder of this year.Given the benign April inflation report released on Tuesday, the shorter end of the GoC yield curve seems like a good place to hide right now, according to the bank.

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Treasury81d ago

Underlying Inflation Is "Screaming" for A More Dovish Bank of Canada, Says Desjardins

Having had nightmares about another round of persistently high inflation, Canadian monetary policymakers can now rest easier after Tuesday's consumer price index for April, said Desjardins.Tuesday's CPI data suggest that underlying price pressures remain extremely muted, noted the bank.The bias-adjusted median and trimmed mean measures of Desjardins now point to an average annual rate of just 1.6%, well below the simple average of 2.1% for the unadjusted measures. The bias-adjusted measures of inflation the bank has developed do a better job of accounting for skew in the distribution of price changes, it stated.The last time the gap between the bias-adjusted and unadjusted metrics was this wide in early 2024, it confirmed the Desjardins thesis that the Bank of Canada was set to embark on an "aggressive" easing cycle.While rate cuts aren't yet on the table, market-implied pricing for two rate hikes seems misplaced, added the bank. An honest assessment of underlying inflation would have the BoC turning more dovish.With the unemployment rate elevated and savings diminished, higher gasoline prices may be chewing through household finances in a way that reduces spending and inflationary impulses in other categories, according to the bank.

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Treasury81d ago

Canada This Week to Have Largest Single Auction Net Issuance in Treasury Bills Since A Year Ago, Says National Bank

Gross treasury-bill issuance in Canada is rising to $31 billion this week, or $1 billion higher, said National Bank of Canada.Of that, the Bank of Canada will buy $310 million, or 1% of the tender, noted the bank.With $25.2-billion maturing on Wednesday, there'll be a "sizeable" $5.8 billion in net supply for investors to absorb. That's the largest single auction net issuance lift since a year ago, stated National Bank.By the end of the week, this will push the bill stock up to $294 billion. That's above the $268 billion target outlined in last month's Debt Management Strategy, pointed out the bank.The federal government also ramped up its bill stock last spring and into the summer, ultimately peaking at $310 billion and moving much lower in the fall, added National Bank.Investors are likely to see that play out again as the government needs to fund bond maturities in June, August and September. So, the bank expects an eventual reduction in auction sizes, but not necessarily in the near term.

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Treasury81d ago

Canada's April CPI Is "Unambiguously" Soft Excluding Gasoline, Calming BoC Rate-Hike Speculation, Says BMO

Canadian consumer prices rose 0.4% month over month non-seasonally adjusted in April, or 0.3% in seasonally adjusted terms, lifting the headline inflation rate to 2.8% year over year from 2.4% the prior month, said Bank of Montreal (BMO).The bump was driven by an 8.9% jump in gasoline prices, which the bank saw coming a mile away.However, the real story in Tuesday's CPI release was how all other prices would respond to the spike in energy costs, and the news there was much better than expected, stated BMO. Before digging into all the "messy" details, one only needs to know that CPI excluding gasoline was up precisely 2.0% from a year ago, so any high-side miss in inflation can be exclusively tied to what's going on at the pumps.Looking beyond the nasty business at the gasoline pumps, this CPI report is "unambiguously" soft, according to the bank. It appears that the sizeable and growing output gap is prompting ongoing disinflationary pressure in many other sectors.The risk is that still-rising energy prices disrupt that calming trend over the next few months.However, near-term Bank of Canada (BoC) rate-hike speculation, which has ratcheted up in recent weeks, should calm on this friendly report, BMO pointed out. This cool core-inflation backdrop reinforces the bank's bias that rate hikes would be a big mistake in the current Canadian economic landscape.Still, the reality is that as long as oil prices continue to grind higher, the rate-hike chatter will remain, said BMO.

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Treasury81d ago

TD Comments on Government Policy Shifts to Help Spur Investment, Growth in Canada

Prime Minister Mark Carney has emphasized that the federal government's ambition is to get Canada "back" to building "big things," said TD.To achieve this, the government is using three levers, the bank noted. The most prominent is the Major Projects Office, which was initially established to deliver government decisions on designated projects within two years. However, the government recently went further, launching a 30-day consultation on regulatory and legislative changes to shorten project review and decision timelines to one year, and to create "federal economic zones" for development, coordinate consultation with Indigenous communities, and other proposed changes.Streamlining regulatory requirements to speed infrastructure development could prove transformational, but is only likely to deliver its main economic benefits over the medium-term, stated TD.With the impact of U.S. tariffs still being felt, the government has deployed two more immediate measures to get investment dollars out, writes the bank in a note. The first is to raise spending on defense and public infrastructure.On defense, billions are allocated to base and cyber infrastructure and the development of a domestic defense industrial strategy, although some equipment will be imported, dampening the impact on Canada's economy. For public infrastructure more broadly, billions are allocated over the next five years for things ranging from hospitals to transportation infrastructure.An increasing number of firms in the Bank of Canada's Business Outlook Survey (BOS) reported that the initiatives were "supporting their sales outlooks".Changes on the tax front have been smaller, added TD. The expansion of the Scientific Research & Development credits, and a rebranded and expanded eligibility for immediate expensing of capital investments (Productivity Super-Deduction) were announced in Budget 2025 with the goal of lowering the marginal tax rate for new investments.The government is looking to lay the groundwork for long-term growth, and new policies may struggle to lift investment in the here-and-now as outlays languish from the effects of the trade war.This leaves the bank expecting that business investment will register "meagre" growth in 2026 after last year's contraction. However, in a sign that things may have started to turn a corner, the BOS showed a notable improvement in investment intentions before the war in the Middle East.Even more encouraging was that the share of respondents prioritizing productivity-enhancing investments continued to trend higher, according to the bank. Coupled with the adoption of artificial intelligence, increased outlays on productivity-enhancing capital could begin to help reverse Canada's multi-year productivity malaise, which is crucial for the country to find success amidst the changing policy and economic environment.

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Treasury81d ago

Canada's Inflation Jumps in April as Energy Prices Drive Headline Gains; Bank of Canada on Hold This Year, Says RBC

Canadian inflation accelerated sharply in April, though less than expected, driven primarily by higher gasoline prices and fading favorable energy base effects, said RBC after Tuesday's consumer price index.Headline CPI rose 0.3% month-over-month seasonally adjusted in April, lifting the annual rate to 2.8% from 2.4% in March, below market expectations, according to the bank.April marked the first month in a year that annual energy price growth was no longer being artificially dampened by the removal of the consumer carbon tax in April 2025, adding further upward pressure to headline readings, noted the bank.The increase in headline inflation, however, continues to overstate underlying price pressures, stated RBC. Much of the strength in April reflected energy-related effects rather than a broad-based reacceleration in inflation across the basket.Excluding food and energy, price growth remained considerably more contained, while core inflation measures were broadly stable and continued to point to easing underlying inflation momentum, pointed out the bank.Measures of core inflation, including CPI-trim and CPI-median, averaged 2.1% year over year in April compared with 2.3% in March. That leaves core inflation running well below levels seen through much of last year and broadly consistent with gradually moderating domestic demand conditions.Tuesday's CPI is consistent with RBC's broader view that higher oil prices will lift headline inflation and cut into household purchasing power but are unlikely to reignite systemic inflation pressures. While some categories, particularly food and shelter, continue to contribute disproportionately to inflation, broader price pressures are easing alongside soft labor market conditions.Upside inflation risks could build the longer energy prices remain at elevated levels, but overall, the April data support RBC's base case that the Bank of Canada will remain on hold for the remainder of 2026.

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Treasury81d ago

Canada's Short-Term Yields Fall After April CPI Rises Less Than Expected, Says CIBC

The headline consumer price index accelerated in April as gasoline prices surged, but the jump wasn't as high as expected and core measures of inflation remained muted, supporting the current wait-and-see stance of the Bank of Canada, said CIBC.Earlier Tuesday, Canada released April's CPI.While price pressures may accelerate further ahead, the weakness of core inflationary measures as oil prices were initially spiking is an indication of the slack that exists within the Canadian economy, which will continue to put downward pressure on inflation components that aren't greatly affected by oil prices, said CIBC.Because of that, CIBC continues to see the Bank of Canada holding interest rates steady at their current level throughout 2026.Shorter-term bond yields fell on Tuesday following the CPI release as investors slightly reduced the magnitude of BoC rate hikes expected before the end of the year, although the move was muted compared with the spike seen last week, noted the bank.Longer-term, or five-year and over, yields remained higher on the day, likely reacting to Tuesday's increase in global oil prices when Canadian markets were closed, it also noted.

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Treasury81d ago

Canada's Price Pressure Look "Unusually" Muted in April, Says Desjardins

Headline prices rose just 0.4%, well below the 0.7% consensus forecast. That left the annual rate of inflation tracking 2.8%, still within the Bank of Canada's 1% to 3% target range. Higher gasoline prices drove the majority of the increase in April. In contrast, food prices were flat.After declining 0.1% in March, prices excluding food and energy were unchanged in April. That traditional measure of core inflation is now running at just 1.5% year-over-year, with the three-month annualized rate even lower at 0.3%. At just 1.8%, the average of the three-month annualized rates of the Bank of Canada's core median and trimmed mean metrics was also very tame. A sharp decline in travel tours and further reductions in cell phone services prices, combined with soft prints in large categories such as food and rent, dulled overall price pressures.The breadth of Canadian outsized price increases narrowed in April, with the share of consumer price index components rising faster than 3% year over year falling to 38% from 41%, said Desjardis after Tuesday's CPI.While that's still slightly elevated, recent price dynamics suggest that metric should continue trending lower in the months to come, noted the bank.The soft inflation print gives the Bank of Canada ample scope to remain patient in assessing the fallout from higher oil prices, stated Desjardins. With the economy operating with slack, higher gasoline prices may cannibalize spending in other areas, thereby keeping underlying price pressures contained.As a result, the bank continues to expect that the BoC will stay on the sidelines for the remainder of this year.While United States Treasury yields are higher again on Tuesday, Government of Canada (GoC) yields at the short end of the curve have declined, added Desjardins.

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Treasury81d ago

No Reason for Bank of Canada to Hike Rates After Today's CPI Update, Says TD

As expected, higher oil prices lifted Canadian inflation in April, but TD Economics isn't yet seeing much of a knock-on effect to non-energy-related goods or services, noting core inflation pressures were actually softer than expected in April.There is little argument yet for Bank of Canada rate hikes here, and market pricing for rate hikes this year has come down a bit early Tuesday, TD noted.Oil prices have remained high in May, so energy prices are likely to keep headline inflation elevated for some time, said the bank. Given a generally soft economic backdrop in Canada, TD expects the effect on core prices to be more "modest." Core inflation is expected to stay reasonably close to the 2% target on a year-on-year basis this year, it added.TD noted Canadian headline consumer price index inflation jumped up to 2.8% year over year in April, from 2.4% in March, slightly below consensus expectations. Higher gasoline prices were a big part of the story, with inflation excluding gasoline up a more modest 2.0% year over year, it said.TD also noted prices at the pump were up 28.6% year over year in April. Energy prices as a whole were 19.2% higher than a year ago, the fastest pace since 2022. "Surprisingly", the bank added, food inflation cooled to 3.5% year over year in April, down from 4% year over year in March.Inflation for various categories was a "mixed" bag, noted the bank. Overall services inflation cooled further to 1.7% year over year, down from 2.6% year over year in March.Higher energy costs haven't yet filtered through to core inflation, stated TD. In fact, core inflation cooled in April. The Bank of Canada's official core inflation metrics (median and trim) averaged 2.1% year over year in April, down from 2.3% in March.

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Treasury81d ago

Softer April CPI in Canada Likely Reflects Slack in Economy, Says CIBC

Canadian headline consumer price index accelerated in April as gasoline prices surged, but the jump wasn't as high as expected and core measures of inflation remained muted, supporting the current wait-and-see stance of the Bank of Canada, said CIBC.The 0.4% month-over-month non-seasonally adjusted increase was three ticks below the consensus forecast, noted the bank after Tuesday's data. While the annual rate accelerated to 2.8%, it didn't breach the 3% mark as expected consensus was 3.1%.Higher energy prices, particularly gasoline, drove the headline acceleration, but price pressures were generally much tamer elsewhere, stated CIBC. Indeed, excluding gasoline, inflation actually decelerated to 2.0% year over year from 2.2% in March.An average of four core inflation measures came in at only 0.1% in April, and the year-over-year prints for CPI-Trim and CPI-Median were both below consensus expectations. Shelter inflation was tame, while air fares and travel tour prices surprisingly fell on a year-over-year basis, it added.Softer core measures of inflation relative to the pick-up seen in the United States is partly a timing issue, as air fares in Canada are included at the time a flight is taken and because of that fare increases seen recently will show up to a greater extent in CPI readings over the summer, according to the bank.However, it is likely also a reflection of the slack that exists within the Canadian economy, placing downward pressure on inflation components that aren't greatly affected by oil prices or transportation costs more broadly, said the bank. Looking forward, the slack currently in the economy lessens the likelihood that the current oil price shock will broaden into wider inflation pressure, and CIBC continues to forecast that the Bank of Canada will hold its overnight rate at its current level this year.

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Treasury81d ago

Canada's Home Prices Continue to Fall for Fifth Consecutive Month, Says National Bank

The Teranet-National Bank Composite Index fell for the fifth consecutive month in April, with property prices declining by 0.7% on a month-over-month basis, said National Bank of Canada on Tuesday.This brought the cumulative price decline to 3.0% over the past five months and 4.5% over the past year, noted the bank. However, the price decline in April was less pronounced than the 1.0% drop recorded in March, as the resale housing market saw its first increase in transactions in six months.Nevertheless, sales levels remain particularly low, with the ratio of transactions per household nationwide still 25% below its historical average, pointed out National Bank.Affordability challenges also continue to weigh on property prices, as evidenced by the fact that the largest declines over the past year were recorded in the country's least affordable markets, while the strongest increases were observed in the most affordable cities, stated the bank.Despite the recent uptick in transactions in the resale market, it is still too early to speak of a sustained recovery for the housing market, it added. Indeed, several factors continue to weigh on the residential sector, including demographic decline, a weak labor market since the start of the year, and trade and geopolitical uncertainty.The conflict in the Middle East has indeed had repercussions on the Canadian housing market, with mortgage rates rising over the past two months as bond yields climbed due to rising inflation. In this context, National Bank expects prices to continue to decline in the coming months, primarily due to particularly loose market conditions in Ontario and British Columbia.

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Treasury81d ago

TD Comments on Government Policy Shifts to Help Spur Investment, Growth in Canada

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