WHAT WE THINK…

 

WHAT WE THINK

“The World Health Organisation declared COVID-19 a pandemic on March 11 at which point there were 118,000 cases in 114 countries and 4,291 deaths. Nearly four months later (as of July 8th) there are 12,260,000 cases in 216 countries and 554,074 deaths. (All data according to www.worldometers.info.) Unfortunately, the number of cases continues to grow at an alarming rate as some countries struggle to control the first wave, while others grapple with re-openings. It appears that the pandemic will continue until a vaccine is found (there are 152 in development) or some sort of herd immunity takes hold.”

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Q2 2020

 

 

Lorica Focused Fixed Income

“Government of Canada and US Treasury yield curves steepened during August, as short-term yields remained largely unchanged, while mid and long-term yields rose, albeit generally within trading ranges established since March. Notably, long Canada’s have not established a well-defined trading range, as the decline in long Canada yields, following the initial decline and rebound in March, has lagged that of long Treasuries, only reaching a recent low point in early August. In contrast, after the initial move, long Treasuries fell to a low point in April and came close again in August. The FTSE Russell Universe Canada Index (modified duration: 7.25 years) returned -1.21% over August versus the Bloomberg Barclays US Treasury Index (modified duration: 7.06 years) at -1.10%.”

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August 2020 Commentary

 

Lorica Focused Corporate Bond

“Market tone remained constructive for domestic credit in August. Credit spreads tightened by an average of 8 basis points over the month, with short and mid-term higher-beta issues outperforming. Primary issuance was almost exclusively BBB-rated and included many infrequent issuers which priced deals with little to no concession and at the low end of guidance. Concerns over BBB-rated credit with negative outlooks also subsided, notwithstanding global potential downgrades near all-time highs. Downgrade potential remains most extreme in the high yield space, with over half of issuers having a negative ratings bias – ratings with negative outlooks or on credit watch with negative implications.”

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August 2020 Commentary

  

Lorica Short Term Bond

“Government of Canada and US Treasury yield curves steepened during August, as short-term yields remained largely unchanged, while mid and long-term yields rose, albeit generally within trading ranges established since March. Five-year Canada and US Treasury yields rose by 6 and 8 basis points, respectively during August, while remaining within 13 bps ranges, in both countries, since mid-June. One-to-five-year yields in Canada and the US have tracked very closely the entire year, while 10-year yields have come largely in-line since March. Long US yields are still trading at a spread to Canada yields, although the spread has narrowed since March to 34 bps, currently. The FTSE Russell Universe Short Canada Index (one to five years) returned -0.05% over August versus the Bloomberg Barclays US Treasury 1-5 Year Index at -0.06%.”

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August 2020 Commentary

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

SHORT TERM

▸2019
▸2018
▸2017
▸2016
▸2015
▸2014

WHAT WE THINK…

 

WHAT WE THINK

“The World Health Organisation declared COVID-19 a pandemic on March 11 at which point there were 118,000 cases in 114 countries and 4,291 deaths. Nearly four months later (as of July 8th) there are 12,260,000 cases in 216 countries and 554,074 deaths. (All data according to www.worldometers.info.) Unfortunately, the number of cases continues to grow at an alarming rate as some countries struggle to control the first wave, while others grapple with re-openings. It appears that the pandemic will continue until a vaccine is found (there are 152 in development) or some sort of herd immunity takes hold.”

Read More→
Q2 2020

 

 

Lorica Focused Fixed Income

“Government of Canada and US Treasury yield curves steepened during August, as short-term yields remained largely unchanged, while mid and long-term yields rose, albeit generally within trading ranges established since March. Notably, long Canada’s have not established a well-defined trading range, as the decline in long Canada yields, following the initial decline and rebound in March, has lagged that of long Treasuries, only reaching a recent low point in early August. In contrast, after the initial move, long Treasuries fell to a low point in April and came close again in August. The FTSE Russell Universe Canada Index (modified duration: 7.25 years) returned -1.21% over August versus the Bloomberg Barclays US Treasury Index (modified duration: 7.06 years) at -1.10%.”

Read More→
August 2020 Commentary

 

Lorica Focused Corporate Bond

“Market tone remained constructive for domestic credit in August. Credit spreads tightened by an average of 8 basis points over the month, with short and mid-term higher-beta issues outperforming. Primary issuance was almost exclusively BBB-rated and included many infrequent issuers which priced deals with little to no concession and at the low end of guidance. Concerns over BBB-rated credit with negative outlooks also subsided, notwithstanding global potential downgrades near all-time highs. Downgrade potential remains most extreme in the high yield space, with over half of issuers having a negative ratings bias – ratings with negative outlooks or on credit watch with negative implications.”

Read More →
August 2020 Commentary

  

Lorica Short Term Bond

“Government of Canada and US Treasury yield curves steepened during August, as short-term yields remained largely unchanged, while mid and long-term yields rose, albeit generally within trading ranges established since March. Five-year Canada and US Treasury yields rose by 6 and 8 basis points, respectively during August, while remaining within 13 bps ranges, in both countries, since mid-June. One-to-five-year yields in Canada and the US have tracked very closely the entire year, while 10-year yields have come largely in-line since March. Long US yields are still trading at a spread to Canada yields, although the spread has narrowed since March to 34 bps, currently. The FTSE Russell Universe Short Canada Index (one to five years) returned -0.05% over August versus the Bloomberg Barclays US Treasury 1-5 Year Index at -0.06%.”

Read More →
August 2020 Commentary

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

SHORT TERM

▸2019
▸2018
▸2017
▸2016
▸2015
▸2014