Commentary

Our insights into Canadian and global credit markets are key to our investment process.
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OUR LATEST HIGHLIGHT IN CORPORATE CREDIT

Highlights from the Week in Corporate Credit:
May 3 – 7, 2021

US credit led the way in a generally upbeat week for risk markets.  A surprisingly soft US jobs report released on Friday suggests fiscal and monetary policies will need to do more to get people back to work.  That means more gas on the flames of risk assets. Equities jumped higher while treasuries struggled to hold meaningful gains.  Once again inflation concerns from investors appear to be preventing treasuries from rallying.  Energy names led the way for US credit spreads after reporting strong quarterly earnings.  For the most part new issues priced aggressively leaving little room for performance.

Energy names were the highlight of the week in Canadian credit markets as well, tightening by over 5 basis points on good earnings from heavyweights like CNQ, IPL, TOUR and ARK among others. Away from Energy, investment grade spreads were largely unchanged on the week. There were two deals of note in the auto sector from Hyundai Motors and Paccar Financial.  The Hyundai deal in particular was highly-anticipated and attracted an impressive number of buyers.  Both deals saw good follow-on buying in secondary trading and finished the week up to 5 basis points tighter.

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