|Bid||101.34 x 0|
|Ask||101.35 x 0|
|Day's Range||100.89 - 101.39|
|52 Week Range||86.25 - 106.51|
|Beta (3Y Monthly)||1.10|
|PE Ratio (TTM)||10.72|
|Earnings Date||Dec 3, 2019|
|Forward Dividend & Yield||4.12 (4.06%)|
|1y Target Est||103.62|
BMO Global Asset Management Announces Estimated Annual Reinvested Distributions for BMO Exchange Traded Funds and ETF Series
TORONTO , Nov. 15, 2019 /CNW/ - BMO Global Asset Management (BMO GAM) was recognized at the 2019 Canada Lipper Fund Awards from Refinitiv with three BMO Mutual Funds and four BMO Exchange Traded Funds (ETFs) receiving top honours in nine categories. The Lipper Fund Awards from Refinitiv recognize the top risk-adjusted performing funds relative to peers and also recognize fund families with high average scores for all funds overall or within a particular asset class.
Investing for income has never been more challenging. Investment trusts are one source of income that is proving resilient, say advisers. This allows them to build up reserves of capital in years of strong corporate dividend growth which can be used to maintain steady income payments to investors when corporate profits are under pressure.
Bank of Montreal Announces Results of Conversion Privilege of Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 31
(Bloomberg) -- The Federal Reserve Bank of New York announced plans to conduct repurchase-agreement operations within the coming month that have longer terms than those it has done previously.It will now conduct two operations each with terms of 42 days, the New York Fed said on its website. One of these will have a maximum size of at least $25 billion and the other $15 billion. The bank is also planning a $15 billion 28-day operation as well as a series of actions with terms of 13, 14 and 15 days, tenors it has used previously.The new longer operations “are intended to help offset the reserve effects of sharp increases in non-reserve liabilities later this year and ensure that the supply of reserves remains ample during the period through year end,” the New York Fed said in a statement. “They are also intended to mitigate the risk of money market pressures that could adversely affect policy implementation.”The schedule released by the Fed includes term operations to take place between Nov. 19 and Dec. 12. The decision to implement some operations with longer terms will allow some funding to carry past the turn of the year, which some have cited as a potential crunch point for funding markets.“The longer dated maturities will offer an early glimpse of year-end cash demand,” BMO strategists Jon Hill, Ben Jeffery and Ian Lyngen wrote in a note to clients.The central bank has been injecting liquidity into the funding markets since Sept. 17, when the rate on overnight general collateral repo jumped to 10% from around 2%. The Fed also started buying Treasury bills last month to add reserves into the system.The size of daily overnight operations will be maintained at $120 billion.The Fed also released on Thursday schedules for its planned monthly secondary Treasury reinvestment and reserve management purchases. The central bank plans to buy $60 billion of T-bills for its reserve management program from Nov. 15 to Dec. 6. This is in line with what it has already been doing. The Fed also plans to buy about $20 billion of Treasuries weighted across different maturities as part of its reinvestment operations.(Updates with comment from New York Fed.)To contact the reporter on this story: Alexandra Harris in New York at email@example.comTo contact the editors responsible for this story: Paul Dobson at firstname.lastname@example.org, Benjamin PurvisFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
NEW YORK, Nov. 13, 2019 /PRNewswire/ - REX Shares, LLC (REX) will add to the MicroSectors™ lineup with the launch of the 1x Exchange Traded Notes linked to the NYSE FANG+™ Index (the Index), which will be issued by Bank of Montreal (BMO.TO)(BMO). The 1x exchange traded note will complement the existing FANG+ ETNs, which currently offer investors from +3x through ‐3x daily resetting leveraged and inverse leveraged exposure. The 1x MicroSectors™ FANG+™ Exchange Traded Notes (symbol:FNGS) (the ETN), started trading November 13, 2019 on NYSE Arca.
BMO QuickPay provides everyday banking customers with a frictionless way to pay their bills, while also putting them in complete control of the payment from start to finish. "We're continually looking for opportunities to deliver digital solutions that empower customers," said Brett Pitts , Chief Digital Officer, BMO Financial Group. "With BMO QuickPay, we leveraged machine learning capabilities to introduce a consumer friendly solution that will help do away with late bill payments.
TORONTO , Nov. 7, 2019 /PRNewswire/ -- BMO Financial Group will announce its fourth quarter 2019 financial results and hold its investor community conference call on December 3, 2019 . Financial results ...
BMO Wins Aite Group's 2019 Cash Management and Payments Innovation Award for Digital Channel Capabilities
BMO, United Way and City of Toronto Announce Greater Golden Mile Neighbourhoods are First for Economic Opportunity Program
(Bloomberg) -- De Beers is taking more drastic steps to stem the crisis in the diamond industry by cutting prices across the board for the first time in years.The company, the world’s biggest diamond producer, lowered prices by about 5% at its November sale, according to people familiar with the matter, who asked not to be identified as the information is private.The move is aimed at helping improve profits for the middlemen of the diamond industry, a group of traders and polishers that buy rough gems from De Beers. Many of these customers, which includes family-run traders in Belgium, Israel and India, as well as the subsidiaries of Tiffany & Co. and Graff Diamonds, are running on wafer-thin profit margins because of low prices and an oversupply of polished gems."De Beers is a price setter and has not made any price cuts thus far, despite the open market price for rough diamonds falling by about 9% year-to-date," said Edward Sterck, an analyst at BMO Capital Markets. "The most important market participant finally taking action after holding out for so long feels like a fairly typical indication that things may be about to improve."The price cut is unlikely to trickle down to the retail market and consumers shouldn’t expect to see diamond prices getting cheaper anytime soon.Part of the problem in the diamond industry is that prices have stagnated as other luxury offerings, like shoes, handbags and resort vacations, crowd the field. It’s also harder for diamond trading companies to find financing because banks are abandoning the sector after being hit by frauds and bad loans.Still, De Beers has insisted that the current weakness doesn’t mean demand has softened. Last week, the company released data that showed demand for diamond jewelry rose 2.4% last year. In the U.S. market, where almost half of all diamonds are sold, the increase was 4.5%.The Elite Club That Rules the Diamond World Is Showing CracksDe Beers sells its gems through 10 sales each year in Botswana’s capital of Gaborone, and the buyers -- known as “sightholders” -- have to accept the price and the quantities they’re offered. It’s a system that originated in the 1890s and is designed to benefit both miner and customer, who receives the diamonds at a discounted rate. But the discount has been shrinking. Some sightholders now struggle to make money from a business that was once highly lucrative.De Beers has offered its buyers more flexibility about their purchases, but it hasn’t been enough. The company made less than $300 million in each of the past three sales, which is the lowest in data going back to 2016.The November sales data, due next week, could indicate whether the price cuts are helping drive demand.Anglo American Plc, which owns De Beers, closed up 1.8% at 2,080 pence in London on Monday.(Updates with analyst quote in fourth paragraph.)To contact the reporter on this story: Thomas Biesheuvel in London at email@example.comTo contact the editors responsible for this story: Lynn Thomasson at firstname.lastname@example.org, Nicholas LarkinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
TORONTO , Nov. 1, 2019 /CNW/ - BMO Asset Management Inc. (the "Manager"), today announced the final net asset values for each of BMO Global Banks Hedged to CAD Index ETF (BANK.TO), BMO Global Insurance Hedged to CAD Index ETF (INSR.TO) and BMO Shiller Select US Index ETF (ZEUS.TO) (each a "Fund" and collectively, the "Funds"). The units of the Funds were previously de-listed, at the request of the Manager, from the Toronto Stock Exchange effective close of business on October 29, 2019 .
TORONTO , Nov. 1, 2019 /CNW/ - BMO Financial Group (BMO.TO)(BMO) announced its intention to appoint George A. Cope as Chair of the Board upon his re-election as an independent director at BMO's Annual Meeting on March 31, 2020 . BMO Chair J. Robert S. Prichard will retire from the board at that time after 20 years of service as an independent director and as Chair since 2012. "George's distinguished record as a public company chief executive and reputation as a strategic leader committed to innovation, growth and good governance make him the ideal Chair to take the board forward," said Mr. Prichard.
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Pocket Cast or iTunes.Federal Reserve officials reduced interest rates by a quarter-percentage point for the third time this year and signaled a pause in further cuts unless the economic outlook changes materially.The Federal Open Market Committee altered language in its statement following the two-day meeting Wednesday, dropping its pledge to “act as appropriate to sustain the expansion,” while adding a promise to monitor data as it “assesses the appropriate path of the target range for the federal funds rate.”“We believe monetary policy is in a good place,” Fed Chairman Jerome Powell said at a news conference following the decision. “We see the current stance of policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook.”As with the September statement, the FOMC cited the implications of global developments in deciding to lower the target range for the central bank’s benchmark rate to 1.5% to 1.75%. Powell also noted in the press conference that the risks associated with trade tensions and Brexit show signs of improving.Prolonged Hold“His comments suggest the Fed is on hold for some time until something changes their outlook,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “He’s still being quite optimistic, I think, particularly about the household sector. That suggests to me the Fed is quite comfortable with what they’ve done so far.”Ten-year Treasury yields fell to 1.77% from 1.80% earlier and the U.S. dollar gained. Traders pared bets on a fourth consecutive rate cut in December.Treasuries had initially weakened on the Fed’s announcement, but then took heart after Powell signaled that there was a high bar to raising rates because inflation remains muted. U.S. stocks advanced late in the session to an all-time high.“We would need to see a really significant move up in inflation that’s persistent before we would consider raising rates to address inflation concerns,” Powell said.While lower rates do little to combat the uncertain trade picture, unemployment has continued to drop, consumer spending has remained solid and more-affordable mortgages have revived the housing market.“What we’ve had is an economy where the consumer is really driving growth,” Powell said. “Overall, we see the economy as having been resilient to the winds that have been blowing this year.”What Our Economists Say“The October FOMC post-meeting communique proffered the possibility of additional policy easing, but dialed back the degree of certainty through subtle language changes. This is consistent with Bloomberg Economics’ expectation that officials would aim to preserve optionality around upcoming meetings, even though we expect tepid economic data to ultimately compel the Fed to act.”\-- Carl Riccadonna, Andrew Husby and Eliza Winger. To see the full note, click hereHours before the decision, the Commerce Department reported the economy grew at a 1.9% annualized pace in the third quarter, exceeding estimates. Better-than-expected consumer spending was partly offset by weakness in business investment.The Fed’s cuts have also calmed markets compared with the beginning of the year when investors grew nervous that monetary policy was too tight. Pricing in fed funds futures implies investors don’t fully expect another reduction until well into 2020.The same cannot be said for President Donald Trump, who has repeatedly attacked the Fed. He complained on Tuesday that it “doesn’t have a clue!” and has called on Powell to slash rates to zero while tweeting favorably about negative rates applied by central banks in Europe and Japan.Dissenting VotesAs with the past two cuts, Kansas City Fed President Esther George and Boston’s Eric Rosengren dissented, preferring to keep rates unchanged.The FOMC didn’t release a new set of economic forecasts and rate projections at this meeting, so it’s unclear how many non-voters on the committee had also penciled in a reduction.The statement again highlighted the essentially positive condition of the U.S. economy. With unemployment at a half-century low, officials continued to describe the labor market as “strong,” job gains as “solid” and household spending as rising at a “strong pace.”Uncertainties RemainAt the same time, they repeated a reference to “uncertainties” in the economic outlook. Officials also made a minor change to say business fixed investment and exports “remain weak.” The prior statement had said that they weakened.That softness has shown up in data from the manufacturing sector this year, though factory output rose slightly in the third quarter.Fed officials have been watching for signs that weakness in manufacturing and faltering confidence in the business sector might threaten consumer spending, particularly if the job market cools. The Labor Department will release its October employment report on Friday.(Updates with stock market reaction in seventh paragraph.)\--With assistance from Emily Barrett, Ben Holland, Sophie Caronello, Vince Golle, Reade Pickert, Katia Dmitrieva and Enda Curran.To contact the reporters on this story: Christopher Condon in Washington at email@example.com;Steve Matthews in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Alister Bull at email@example.com, ;Margaret Collins at firstname.lastname@example.org, Scott Lanman, Jeff KearnsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- I wouldn’t be surprised if Federal Reserve Chair Jerome Powell was all smiles as he watched the financial markets move in the minutes after the central bank’s interest-rate decision on Wednesday.Heading into this week, the bond-market consensus was that the Fed would deliver its strongest “hawkish cut” yet — acquiescing once again to futures pricing but strongly suggesting that its “mid-cycle adjustment” in policy is complete. That’s exactly what happened. The Fed cut its benchmark lending rate by a quarter-point for the third time since July, to a range of 1.5% to 1.75%, and lowered the interest rate on excess reserves by the same amount, to 1.55%. In a sign of just how ready bond traders were for this move, two-year Treasury yields barely budged from about 1.625%, the precise midpoint of the new target range, in the half hour before Powell began speaking.The most important part of the Federal Open Market Committee’s statement was that it removed the phrase that policy makers would “act as appropriate” to sustain the economic expansion. “That has been the signaling language to tip the hand that we’re moving rates; you take it out to tell the market that we’re done,” Jeffrey Rosenberg at BlackRock Inc. said. Sure enough, odds of another interest-rate cut at the central bank’s December meeting barely budged.Powell hammered home that point in his opening statement at his press conference: “We believe monetary policy is in a good place,” he said, using a phrase he normally employs to talk about the U.S. economy, not the level of interest rates. The current stance is “likely to remain appropriate,” he said. In response to a question by Bloomberg’s Michael McKee about what it would take to ease again, he said a “material reassessment of our outlook.” As for going the other way? “We're not thinking of raising rates right now.”This is about as close to a hard stop as could reasonably be expected from the Fed after three consecutive interest-rate cuts. And, compared with recent history, Powell appeared determined to stick to script (often literally — he read back from his opening statement during the question-and-answer portion as much as ever). That’s in contrast with his other attempts to thread the needle of easing monetary policy while sounding optimistic about the economic outlook. He seemed to just want to undo the December 2018 rate hike in July but was quick to suggest the Fed could drop rates further after hearing the stock market was tumbling. In September, sharp dissent among the ranks of the FOMC reflected an unease with back-to-back rate cuts. While Kansas City Fed President Esther George and Boston Fed President Eric Rosengren dissented for the third consecutive time, in favor of no rate move, there was no argument from St. Louis Fed President James Bullard for dropping the fed funds rate further. He advocated for a 50-basis-point reduction at the September meeting. Judging by the “dot plot,” which wasn’t updated this time, it seems as if Powell speaks for the entirety of the central bank in saying that interest rates are now in a good place.“In short, a clean hawkish cut,” said Jon Hill at BMO Capital Markets. The yield curve flattened a bit, but relative to August’s inversion, the 16 basis point spread between two- and 10-year Treasuries feels like a massive buffer. That shouldn’t be especially worrisome to Fed officials. Powell also discussed the funding markets after the Fed’s announcement earlier this month that it would begin buying $60 billion of Treasury bills a month to keep control over short-term interest rates. As he has before, Powell emphasized that the purchases are not the same as post-crisis quantitative easing but rather a more technical move by the central bank. The Fed’s balance sheet has increased by about $200 billion since the mid-September repo meltdown, to almost $4 trillion.As I wrote earlier this week, it seems as if the Fed is ready for a break, and it looks as if bond traders will allow it. The economic data released in the hours before the interest-rate decision affirmed the central bank’s outlook for “moderate growth.” Third-quarter real gross domestic product growth was 1.9%, beating the consensus forecast of 1.6%. If there are no revisions, growth would need to be just 1.6% in the final three months of the year to meet the Fed’s 2019 forecast for 2.2%.None of those figures are particularly riveting, even if President Donald Trump tweeted “The Greatest Economy in American History!” But for bond traders and Fed officials alike, boring is beautiful.As Powell said, it’s too soon to say whether the central bank has achieved the fabled “soft landing.” But short-term interest rates are now down 75 basis points in about 90 days. As he also said, that’s “a very substantial shift.” The Fed is right to let its swift actions filter through into the economy before assuming it needs to do anything more.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Pocket Cast or iTunes.Bank of Canada Governor Stephen Poloz, one of the few central bankers to resist the global push toward easier monetary policy, acknowledged he’s begun to consider the merits of joining other countries in lowering borrowing costsAt a press conference after the Bank of Canada’s decision to keep the current 1.75% policy interest rate unchanged for an eighth straight meeting, Poloz said his governing council discussed the possibility of implementing an “insurance” cut to counter global economic headwinds, but decided against it because of the potential costs to such a move. These include driving up inflation already at the central bank’s 2% target, and fueling household debt levels that are among the highest in the world.“Governing Council considered whether the downside risks to the Canadian economy were sufficient at this time to warrant a more accommodative monetary policy as a form of insurance against those risks, and we concluded that they were not,” Poloz said. The Bank of Canada “is mindful that the resilience of Canada’s economy will be increasingly tested as trade conflicts and uncertainty persist.”While the decision to remain on hold for now will cement Poloz’s status as an outlier, markets will interpret his comments about an insurance cut as an attempt to lay the groundwork for a future move if the domestic economy deteriorates. Earlier, the central bank released a rate statement that was more dovish than other recent communications, along with a set of reduced growth forecasts.Market ReactionCanada’s currency fell as much as 0.8% after the decision, the most in almost a month, trading at C$1.3178 against the U.S. dollar at 12:11 p.m. Toronto time. Two-year government bond yields dropped 13 basis points to 1.58%. Investors are assigning a 75% chance of a quarter-point cut in the next 12 months, versus less than a 50% chance before the statement.“The Bank of Canada held its target overnight rate unchanged, as expected, but with a slightly more dovish tilt,” Brett House, deputy chief economist at Scotiabank, said by email. “While not entirely setting up a cut at its next meeting, this leaves open the door a bit further for a December cut.” The next rate decision is on Dec. 4.Doug Porter, chief economist at Bank of Montreal, said in a note to investors that the Bank of Canada appears to have adopted a “bias to cut rates, and we may be just one more serious global trade accident away from them acting on the bias.”By holding steady, Canada will be left with the highest policy rate among advanced economies if the Federal Reserve cuts later Wednesday, as expected. That raises the question of whether the northern nation’s economy is truly strong enough to justify the distinction.The Bank of Canada is bullish on consumption and housing -- which are being fueled by a robust labor market. Wage gains are accelerating, now hovering at around 3%, a level consistent with an economy at full capacity. Global financial conditions meanwhile have eased, helping offset the impact of growing trade uncertainty, officials said Wednesday.Another source of future growth, meanwhile, could be additional stimulus from Prime Minister Justin Trudeau’s re-elected Liberal government, which has promised to implement new spending and tax cuts next year. The central bank is projecting inflation will remain at the 2% target over the projection horizon, and expects the nation’s “modest” levels of economic slack -- primarily in oil-producing regions -- will dissipate.“We will pay close attention to the sources of resilience in the Canadian economy, notably consumer spending and housing activity,” said Poloz. “We will also be watching for any changes to fiscal policy at the federal level now that the election is behind us.”What Our Economist SaysThe statement and Monetary Policy Report “reinforces our view that the Bank of Canada is likely to make a modest downward adjustment to the policy rate by early 2020 -- or even as soon as December.”\--Andrew Husby, Bloomberg Economics (click here for the full note)At the same time, the central bank has clearly concluded the global trade tensions have become a serious threat to the nation’s feel-good story. The central bank on Wednesday highlighted the impact of trade conflicts and uncertainty on global growth which officials said is hurting business investment, exports and commodity prices, even with global monetary easing.The bank lowered its growth forecast for Canada to 1.7% next year, from a July estimate of 1.9%, and 1.8% in 2021 from a previous projection of 2%. It also forecast an outright decline in exports and business investment in the second half of this year, when growth is expected to average a sluggish 1.3%. As a result, the level of economic output will be “slightly lower” at the end of 2021 than predicted in July.Officials also noted -- in a rare reference to the Canadian dollar in a rate statement -- that “despite” lower commodity prices, the currency hasn’t weakened against the U.S. dollar and is actually stronger against other currencies. While Poloz chose to cite the costs of cutting in his opening statement, one of the negative consequences of the Bank of Canada holding rates steady has been to drive gains in the Canadian dollar -- the world’s best performing currency this year.(Updates with comments and details throughout.)\--With assistance from Erik Hertzberg and Shelly Hagan.To contact the reporter on this story: Theophilos Argitis in Ottawa at email@example.comTo contact the editors responsible for this story: Theophilos Argitis at firstname.lastname@example.org, Chris Fournier, Stephen WicaryFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Investors are bracing for the dollar to keep appreciating through at least early 2020 even though the Federal Reserve looks poised to cut rates and the risk of a U.S. recession remains elevated.The dollar has already surprised investors by holding steady even after Fed reductions in July and September. Now, with the world’s growth outlook decidedly downbeat, Columbia Threadneedle Investments is positioning for the greenback to strengthen against the euro by more than many forecasters are predicting over the next three to six months.A trio of catalysts should support the dollar through the first quarter, according to Columbia Threadneedle’s Ed Al-Hussainy: U.S. rates exceed most other developed nations, domestic inflation is in a “better place” than Europe’s, and global growth expectations are being downgraded. The senior analyst says the $469 billion asset manager is prepared for the greenback to strengthen toward parity -- a level it hasn’t traded at since 2002 -- against the euro, from about $1.1090 currently, despite the common currency rallying 1.7% against it in October.Economic theory suggests the dollar should move in the same direction as interest rates, but reality shows that’s not always the case. At the moment, a mix of positive and negative U.S. data, along with occasional progress on trade and Brexit, are complicating Fed policy makers’ assessment of the economy as their two-day meeting in Washington gets underway. After Wednesday’s expected reduction, it’s unclear whether the central bank will cut rates again soon.“The theory that the dollar should be weakening, along with the Fed lowering rates, depends on whether the rest of the world is in a steady state, with no radical changes in policy being undertaken,” said Scott Kimball, a Miami-based bond portfolio manager whose team oversees $12 billion for BMO Global Asset Management.“Instead, it’s the exact opposite: Central banks are messing with policy in atypical ways and, in the midst of that, everyone is scrambling toward liquidity doors,” Kimball said by phone. “Negative rates overseas and weak currencies abroad are going to continue to drive people into positive rates and strong opportunities. There’s nothing we see that’s going to deter the dollar, even in these unusual times.”Kimball said he sees the greenback rising “for a painfully long time” as capital flows from around the world pour into the U.S. and global interest-rate policies drive investors into American bonds, which offer higher rates. As a result, he says he’s been buying more intermediate- and long-term corporate bonds.Overnight index swaps indicate that markets have priced in almost a full rate cut for Wednesday, and an additional reduction by September 2020.The Bloomberg Dollar Spot Index was little changed Tuesday after climbing 0.3% last week.The last time the dollar largely held onto its strength into a recession was before, during and after the 2001 downturn fueled by the Internet bubble’s collapse and the Sept. 11 terrorist attacks.That year, the Fed cut rates a total of 11 times in 25- and 50-basis-point increments, but the U.S. Dollar Index rose 6.6% from the end of 2000 through the end of 2001. At the time, the dollar appreciated sharply on perceived haven flows, even while the economy was sliding into recession and fundamentals were deteriorating, said Ben Randol, an FX strategist at Bank of America.The bank sees the dollar appreciating against most currencies except the yen into year-end. Though the greenback is overvalued, unresolved global tensions are one factor that “can keep it on a rising path,” Randol said. On the flip side, “a potentially less threatening global backdrop” could cause the dollar to weaken in 2020, he added.Granted, there are more than a few people suggesting the greenback may already be at or near its peak. Commerzbank’s Ulrich Leuchtmann and Scotiabank currency strategist Shaun Osborne say softer U.S. growth may help undermine the currency’s haven appeal.But even those awaiting a dollar bear market are having a hard time identifying when that might happen. Alessio de Longis, a New York-based multi-asset fund manager at Invesco, says it would take a sustainable rebound in growth outside the U.S., particularly in Europe and emerging markets, and “right now we’re not seeing that catalyst yet.” For the time being, he’s bullish on the Mexican and Colombian pesos and Brazilian real, and using the Swiss franc, Australian and New Zealand dollars as funding currencies.While a U.S. recession is hardly inevitable, the domestic data is on a “knife edge” and the “margin of safety in 2020 is eroding,” Al-Hussainy said via email. To support growth next year, it would take some combination of steady consumer spending, lower rates, a weaker dollar and fiscal stimulus in the U.S., Europe or China, he says.(Adds dollar gauge in ninth paragraph.)\--With assistance from Edward Bolingbroke.To contact the reporters on this story: Vivien Lou Chen in San Francisco at email@example.com;Susanne Barton in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Benjamin Purvis at email@example.com, Nick Baker, Mark TannenbaumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Heading into the Federal Reserve’s interest-rate decision this week, the consensus is that the central bank will cut its lending benchmark for the third time in as many meetings. But, unlike the past two, there’s belief that Chair Jerome Powell will strongly suggest a timeout on monetary easing this time around.Perhaps the strongest case for this conviction is the recent moves in the $16 trillion U.S. Treasury market. Two-year yields, at 1.64%, are up almost 30 basis points from earlier this month, while 10-year yields have climbed more than 40 basis points from their lows. The yield curve between those two maturities is the most positively sloped since before the Fed’s first rate cut in July — a far cry from August’s “doom and gloom.” Just since Oct. 3, fed funds futures have priced out about one-and-a-half quarter-point rate cuts by the central bank through the end of 2020. A gauge of interest-rate volatility fell last week by the most since early April.Taken together, the evidence suggests that bond traders are on board with this week marking the end of the central bank’s “mid-cycle adjustment.” I wouldn’t be so sure about that. By now, it should be clear to all Fed watchers that “data dependency” takes a backseat to bond markets when push comes to shove. The central bank simply doesn’t shock traders with its decisions. That was true in July, it was true in September and it will be true again this month. The bond market’s more cheery outlook in recent weeks is effectively summarized by this quote from Subadra Rajappa, head of U.S. rates strategy at Societe Generale: “We’ve seen a mood switch to optimism on Brexit, optimism on the trade front,” she said. And for that reason, “this might be the most opportune time, if the Fed does want to pause, to go ahead and suggest that.”Powell can “suggest” his view of the path ahead all he wants. But recent history has shown that whatever he says in his post-meeting press conference doesn’t really matter when it comes to the next interest-rate decision. Especially when the reasons for optimism are so fragile and subject to change at any moment.Consider July’s rate cut. Powell indicated that the committee was thinking of the move as a “mid-cycle adjustment to policy” as opposed to “the beginning of a lengthy cutting cycle.” That mattered for less than 24 hours. President Donald Trump announced additional tariffs on Chinese goods, sending investors running to Treasuries and giving the Fed little choice but to further ease policy as the yield curve inverted the most since 2007.Even September’s meeting provided something of a “hawkish cut.” Esther George and Eric Rosengren openly dissented against dropping interest rates, and a total of five Fed officials indicated they disagreed with the move, judging by the “dot plot.” And yet, a few bad readings on the U.S. economy at the start of October sealed this week’s rate cut. The dot plot, by the way, illustrates why the Fed feels it needs a break. Policy makers won’t update their forecasts at this meeting, but as it stood last month, not a single official saw the fed funds rate dropping below the range of 1.5% to 1.75% at any point through at least 2022. To reiterate: 41 days ago, when looking three years into the future, not even the most dovish Fed members expected to lower their benchmark beyond where it’ll almost certainly end up this week. Of course, the constraints of the dot plot have never stopped the Fed before. It’s worth remembering that the median forecast as recently as June was for the fed funds rate to remain in a range of 2.25% to 2.5% through 2019 — the same level as the start of the year. The projections have been scratched out and revised so frequently over the years that it’s no wonder the bond market’s view is taken as gospel.All this is to say, just because traders haven’t fully priced in another interest-rate cut by year-end doesn’t mean they won’t by the time the Fed’s next decision rolls around on Dec. 11. I’m sure part of the reason they pared back expectations for further easing is because in other instances of mid-cycle adjustments in the 1990s, lowering rates by 75 basis points was enough to get the economy on stable footing. That could very well be the case this time around.But it would be misguided to simply use history as a guide. There are too many wild cards at play. For instance, Mark Spindel, chief executive officer of Potomac River Capital, says the Fed is one bad jobs report away from fretting that it hasn’t done enough easing. BMO Capital Markets sees a scenario in which Powell struggles so much in explaining the Fed’s outlook that it triggers a fresh “policy error flattening” of the yield curve. Chris Low at FTN Financial expects Powell will take the path of least resistance: “Given a choice between ruling out further cuts and leaving the door open, we expect Powell to leave the door open. Participants can always talk down future rate-cut probabilities if data strengthen.”That might be wishful thinking. Time and again, the Fed has seen bond traders take any opening for further easing and running with it. At the July press conference, after Powell was told that stocks were tumbling based on how he described the rate cut, he quickly changed tone and said “I didn’t say it’s just one.” Fast-forward to the present, and we’re on the cusp of the third consecutive quarter-point reduction with the S&P 500 at an all-time high.If Powell is serious about pressing pause on the interest-rate cuts, he will have to put on his most convincing performance to date. Otherwise, expect bond traders to push for more on any signs of bad news.To contact the author of this story: Brian Chappatta at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
TORONTO , Oct. 28, 2019 /CNW/ - Further to the announcement by Bank of Montreal (the "Bank") (BMO.TO)(BMO) on September 27, 2019 , the Bank today announced the applicable dividend rates for its Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 31 (the "Preferred Shares Series 31") and Non-Cumulative Floating Rate Class B Preferred Shares, Series 32 (the "Preferred Shares Series 32").
(Bloomberg Opinion) -- Value stocks have lagged behind the broader market for so long that more than a few of Wall Street’s best and brightest declared that investing in companies whose shares are trading at a deep discount despite stable and predictable earnings made no sense. That just shows why it often pays to tune out the countless talking heads opining on markets.The S&P 500 Value Index is on a tear, setting a record this week. The benchmark is now up 21.1% for the year, topping the 19.6% gain for the S&P 500 Growth Index, which tracks shares of companies trading at a premium and have the potential for faster earnings growth. Those who scrutinize past trading patterns to predict future results are especially encouraged that the value gauge has broken out of the top end of the trading range that it has been stuck in since early 2018. To them, this is a clear bullish signal — and not just for value stocks. “Technicals not only remain positive for the group, but cross-market correlations and relationships with macro data suggest the price action points to an improved outlook for broader risk markets,” the strategists at JPMorgan Chase & Co. wrote in a report Wednesday. To them, what’s really exciting about this move higher is that it’s being led by financials, the largest sector weighting in the value index. On a fundamental basis, higher share prices for banks, brokers, insurers and similar companies is a good sign that investors are betting the economy may be able to avoid a recession that many economist forecast may hit next year.That’s the view of the optimists. The pessimists would say it only makes sense to shift into value shares with a recession looming because the earnings of those companies would be less likely to suffer. The strategists at Cantor Fitzgerald noted this week that in recent years the shift from growth to value has tended to precede weakness in the S&P 500 Index, like what happened at the end of 2018 and earlier that year.BOND TRADERS SHUN OBVIOUS HEDGESome Federal Reserve officials are still forecasting higher interest rates in the next 24 months, according to the central bank’s latest “dot plot” of projections released on Sept. 18. Even so, the bond market isn’t worried, judging by demand at the Treasury Department’s monthly auction Wednesday of $20 billion in two-year notes with rates that float higher or lower with benchmarks. Investors bid for just 2.58 times the amount of securities offered, the lowest so-called bid-to-cover ratio since the government began offering the notes in January 2014. The Fed meets next week to set rates, and the market is expecting policy makers to cut their target for overnight loans between banks for the third time since July to a range of 1.50% to 1.75%. And it’s not as if they have been overly dovish of late. Positive comments from the U.S. and China on their trade talks and progress on the U.K.’s efforts to leave the European Union have alleviated some pressure on the global economy. If Fed Chairman Jerome Powell attempts to frame any rate cut next week “as the final act of accommodation before rates go back on hold, there could be limited room” for bonds to rally, the top-ranked rates strategists at BMO Capital Markets wrote in a research note Wednesday.BRIDLED OPTIMISMPresident Donald Trump said Wednesday that he is lifting recently imposed sanctions against Turkey after the country complied with a cease-fire agreement with Kurdish forces in Syria. That, naturally, gave the Turkish lira a boost; it rose as much as 1.43% in its biggest gain since Sept. 12. Even so, the gains only brought the lira back to where it was a little more than two weeks ago, suggesting traders still see a lot of downside in holding what may be today’s riskiest currency. The lira is down 4.92% in 2019, poised for its seventh consecutive losing year, having depreciated about 63% since 2012. Economists surveyed by Bloomberg forecast that Turkey’s economy will contract next year. Just last week, official data showed industrial output fell for a 12th consecutive month in August, extending the longest streak of declines since the global financial crisis in 2009. Conditions are so dire that Turkish central bank officials discussed an “accounting tweak” that could boost a dividend payment to the government and help cover a budget deficit, Bloomberg News reported Tuesday, citing a person familiar with the matter. Under that scenario, going long the lira is not for the faint of heart.PIGS ARE HOPPINGThe most fascinating part of the commodities market these days may be the one for hogs. It’s not about prices, which have been stuck in a tight range since early August. Rather, all the action is on the supply side. Bloomberg News reports that China’s large-scale hog farms that survived the African swine fever outbreak are expanding their herds, which should drive a recovery in sow numbers as early as next year. The virus, which kills most pigs in two weeks but isn’t known to harm humans, has slashed China’s swine herd by half since it was first reported in August last year, according to Rabobank. That’s led to a huge shortfall in pork supplies. China’s pork purchases from overseas jumped more than 70% in September from a year earlier. In the U.S., more than 40 million pounds (18,000 metric tons) of pork bellies, the cut used for making bacon, were sitting in refrigerated warehouses as of Sept. 30, Bloomberg News reported, citing U.S. government data released Tuesday. That’s the most for the month since 1971. U.S. hog producers started building up their herds in anticipation of more demand for meat imports from China, but that’s mostly led to an excess of supplies in the U.S.IT’S NOT WORKINGAfter saying the nation was “at war” with itself and condemning protesters, President Sebastian Pinera of Chile has softened his tone and pledged the government would seek dialogue and work on social measures. So far, that’s failing to settle markets. Chile’s benchmark stock index tumbled 4.61% on Monday, recovered a bit on Tuesday by rising 0.80% only to resume its decline Wednesday by dropping 1.65%. Workers on Wednesday proceeded with planned strikes and demonstrations, with at least three facilities owned by state copper producer Codelco disrupted as unions encourage members to join anti-government protests that have swept Chile for the past five days, according to Bloomberg News. Demonstrations are going ahead even after Pinera asked for forgiveness for the failure of successive governments to adequately address inequalities. Pinera has pledged to raise the maximum income tax rate to 40% from 35%, lift basic pensions by 20% and introduce a guaranteed minimum income. The problem is that the concessions threaten the government’s previous economic agenda, which included allowing shareholders to offset corporate taxes against personal payments and a bill to boost pensions by bolstering the existing system of individual savings accounts. Protesters are demanding a return to a publicly run retirement system. It’s no wonder the strategists at JPMorgan this week slashed the country’s equities to “underweight” from “neutral.”TEA LEAVESMario Draghi will preside over his final monetary policy meeting as head of the European Central Bank on Thursday before handing the reins to Christine Lagarde. He will always be remembered for keeping the euro from breaking apart by saying during the height of the region’s debt crisis that the ECB would do “whatever it takes” to preserve the currency union. In that sense, his legacy will be seen as successful, especially because it enriched investors. The euro has appreciated about 5.70% against a basket of developed-market peers tracked by Bloomberg since he became president of the ECB in November 2011. That’s second only to the Swiss franc’s 19% surge and the dollar’s 30% gain. The Bloomberg Barclays Euro Aggregate Index of bonds has soared 47%, far better than the 15% gain in the Bloomberg Barclays Global Aggregate Index. The one laggard — if it can be really seen as such given the euro almost collapsed— has been the equities market, with the STOXX Europe 600 Index gaining about 66%, compared with 76% for the MSCI All-Country World Index. But as good as Draghi has been for financial markets, his legacy in terms of the actual economy won’t be viewed as favorably. The IMF said last week that it expects the euro zone economy to expand just 1.2% this year, compared with 1.7% on average for advanced economies.DON’T MISS The Longer-Term Lessons of the Repo Market Turmoil: Bill Dudley WeWork Saga Is Also Cautionary Investment Tale: Mohamed El-Erian Stocks Near Record Highs Send False Signal: Komal Sri-Kumar Caterpillar Shows Worry’s Role in Recession: Brooke Sutherland Chile’s Protests Set It Apart From Latin America: Mac MargolisTo contact the author of this story: Robert Burgess at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Robert Burgess is an editor for Bloomberg Opinion. He is the former global executive editor in charge of financial markets for Bloomberg News. As managing editor, he led the company’s news coverage of credit markets during the global financial crisis.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.