WHAT WE THINK…

 

WHAT WE THINK

“We look forward to 2021. It is hard to imagine more uncertainty than what we experienced in 2020, but from a capital markets perspective 2009 was worse. Our lives were plenty upended in 2020, but policy-makers had the benefits of a dress rehearsal during the credit crisis which enabled them to respond quickly and effectively to stabilize markets and the economy – as much as possible. With the deployment of the vaccine in progress, the US election out of the way, Brexit resolved, some key uncertainties have disappeared, although many still remain. There are still big unknowns related to the virus: mutation, vaccine production, distribution, acceptance, efficacy, number and severity of subsequent waves, etc. The global economy is still vulnerable and as yet, no-one has addressed how the mountains of corporate and government debt will be dealt with. And geopolitical risks will not easily dissipate, given the growing assertiveness of China, the boldness of Russia, the desperation of Iran, and a new administration in Washington.”

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Q4 2020

 

 

Lorica Focused Fixed Income

“Five-year and under US Treasury and Government of Canada yields were basically unchanged during January. However, long Canada yields followed the lead of long US Treasury yields higher early in the month, but remained relatively stable thereafter, resulting in steeper government yield curves. Provincial spreads narrowed slightly resulting in outperformance over Canadas, while corporate yield spread narrowing was more pronounced (with a greater narrowing for longer maturities) contributing to their outperformance against all governments.”

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January 2021 Commentary

 

Lorica Focused Corporate Bond

“The domestic spread curve flattened – with the decline increasing with maturity – through late January as equity markets rallied and bond yields rose in anticipation of US fiscal stimulus and the possible impact on inflation, despite more troubling economic prospects due to COVID restrictions on consumer activity. Sentiment weakened thereafter as equity market volatility was heightened considering uncertainty over vaccinations and the timing and scope of a fiscal package. Overall, credit spreads tightened by an average of 7 basis points for the month with lower-rated, higher-beta issues outperforming.”

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January 2021 Commentary

  

Lorica Short Term Bond

“Although five-year and under yields remained relatively stable during the month, there was a noticeable steepening of the 2 to 5- year Canada yield curve by 8 basis points – there was some speculation that the Bank of Canada would consider a micro-cut to overnight rates which contributed to the move. Provincial spreads narrowed slightly resulting in outperformance over Canadas, while corporate yield spread narrowing was more pronounced contributing to their outperformance against all governments.”

Read More →
January 2021 Commentary

WHAT WE THINK…
▸2020
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
 
 
FOCUSED FIXED INCOME
▸2021
▸2020
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
FOCUSED CORPORATE BOND
▸2021
▸2020
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011

SHORT TERM

▸2021
▸2020
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014

WHAT WE THINK…

 

WHAT WE THINK

“We look forward to 2021. It is hard to imagine more uncertainty than what we experienced in 2020, but from a capital markets perspective 2009 was worse. Our lives were plenty upended in 2020, but policy-makers had the benefits of a dress rehearsal during the credit crisis which enabled them to respond quickly and effectively to stabilize markets and the economy – as much as possible. With the deployment of the vaccine in progress, the US election out of the way, Brexit resolved, some key uncertainties have disappeared, although many still remain. There are still big unknowns related to the virus: mutation, vaccine production, distribution, acceptance, efficacy, number and severity of subsequent waves, etc. The global economy is still vulnerable and as yet, no-one has addressed how the mountains of corporate and government debt will be dealt with. And geopolitical risks will not easily dissipate, given the growing assertiveness of China, the boldness of Russia, the desperation of Iran, and a new administration in Washington.”

Read More→
Q4 2020

 

 

Lorica Focused Fixed Income

“Five-year and under US Treasury and Government of Canada yields were basically unchanged during January. However, long Canada yields followed the lead of long US Treasury yields higher early in the month, but remained relatively stable thereafter, resulting in steeper government yield curves. Provincial spreads narrowed slightly resulting in outperformance over Canadas, while corporate yield spread narrowing was more pronounced (with a greater narrowing for longer maturities) contributing to their outperformance against all governments.”

Read More→
January 2021 Commentary

 

Lorica Focused Corporate Bond

“The domestic spread curve flattened – with the decline increasing with maturity – through late January as equity markets rallied and bond yields rose in anticipation of US fiscal stimulus and the possible impact on inflation, despite more troubling economic prospects due to COVID restrictions on consumer activity. Sentiment weakened thereafter as equity market volatility was heightened considering uncertainty over vaccinations and the timing and scope of a fiscal package. Overall, credit spreads tightened by an average of 7 basis points for the month with lower-rated, higher-beta issues outperforming.”

Read More →
January 2021 Commentary

  

Lorica Short Term Bond

“Although five-year and under yields remained relatively stable during the month, there was a noticeable steepening of the 2 to 5- year Canada yield curve by 8 basis points – there was some speculation that the Bank of Canada would consider a micro-cut to overnight rates which contributed to the move. Provincial spreads narrowed slightly resulting in outperformance over Canadas, while corporate yield spread narrowing was more pronounced contributing to their outperformance against all governments.”

Read More →
January 2021 Commentary

WHAT WE THINK…
▸2020
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
Q4
Q3
Q2
FOCUSED FIXED INCOME
▸2021
▸2020
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
FOCUSED CORPORATE BOND
▸2021
▸2020
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011

SHORT TERM

▸2021
▸2020
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014