Andrew Masliwec reviews this week’s yield rates, economic news and retail sales

  • Andrew Masliwec, Analyst, Capital Markets


I had a nice long victory speech planned this morning to accompany this commentary. However, that was quickly derailed and all writing had to be stopped as I watched the Team Canada Men’s hockey team lose to the Germans. Luckily, I hand write all my commentary with a No. 2 pencil. After a couple half hours of erasing, I now once again have a blank slate to never speak of that loss again.


Yields are lower this week on what was a short week of trading in North American markets as Monday was a holiday for both countries (with the exception of some provinces). Canadians spent time with their families, while American’s celebrated their President on President’s Day.

A quick recap below of the movements in the last little while in the rates market:



Last Week

3 Weeks Ago

3 Months Ago

Current 5 Year





Current 10 Year





5 Year CMB





10 Year CMB






To give a quick summary: yields are lower than the beginning of the month, equity markets have stabilized from major volatility and it’s a good time as any to inquire First National about all your commercial financing needs.

Economic news

There were three economic releases this week that are worth mentioning. The major being CPI numbers, which were released this morning. CPI, which is what the Bank of Canada uses to measure inflation in the economy, came in higher than expected by market participants. The January month-over-month number was 0.7% while 0.5% was surveyed.  The year-over-year number for January was 1.7%, 20 bps higher than what was expected at 1.5%.

Core consumer prices, which excludes volatile numbers like energy and bitcoin, moved higher for the fourth month in a row. Statistics Canada, the provider of all things numerical, mentioned the recent minimum wage increase in Ontario as the main fodder for higher core consumer prices. Ontario’s inflation rate was 1.8%, which is far and ahead of the rest of the provinces. Another interesting tidbit to note, restaurant prices had a 1.9% monthly increase in January, the highest since 1991.

This week also brought both wholesale trade sales and retail sales numbers for December. Both these numbers came in weaker than expected. The retail numbers were surprisingly bad, coming in at -0.8% MoM vs -0.1% as surveyed. The weakness was due in part to the poor sales in electronics following November and Black Friday.  

The key take away is that the Bank of Canada is still widely expected to keep interest rates unchanged in March and will hike interest rates an additional two or three times in 2018. Less interesting points to note:

1) I can’t believe I mentioned Black Friday in February and;

2) There’s only (!) 305 days until Christmas.

I’ll end it there. Fresh wounds take time to heal and a complete embargo on schnitzel.