- The TD Financial Stress Index (TDFSI) for the U.S. improved sharply last week, falling to its lowest level since February 2008, while the Canadian index continued its measured improvement.

- While every subcomponent of the U.S. index improved, the biggest driver was a significant improvement in CP spreads, and ABCP in particular. Risk premiums continue to recede in financial markets and have returned spreads in these two markets to their July/August 2007 levels.

- CP issuance and outstanding levels remain low, though, so supply has yet to normalize.

- The improvement in the Canadian index was also broad based, with long-term bank debt costs at their cheapest level in six months and short-term costs nearing in on their pre-September levels.

Join the Discussion