Overall activity in the Canadian fixed income market was subdued in third quarter with trading and financings down from the second quarter, according to a report released today by the Investment Dealers Association of Canada.

Despite the weaker third quarter, the bond market has held ground this year, the IDA says. For the first nine months, total bond trading is up 2% and new issuance is up 8% over the same period in 2003.

Government of Canada gross bond issuance totalled $14.7 billion in 16 issues, up 7% in value from last quarter but down 9% from Q3 2003.

Trading in federal bonds totalled $1.03 trillion, down 9% on a yearly basis.

Real return bond trading was $3.3 billion, down 31% in value from last quarter and down 9% from Q3 2003.

Provincial gross bond issuance totalled $6.9 billion in 44 new issues, down 21% in value from last quarter but up 18% compared to Q3 2003.

Trading of provincial bonds totalled $86.5 billion, down 8% from last quarter but up 34% over Q3 2003.

Municipal gross bond issuance was $0.6 billion in 49 new issues, up 4% in value compared to last quarter but down 45% compared to Q3 2003.

Corporate debt issuance was $10.2 billion, down 18% from last quarter and down 27% over the same quarter a year ago.

Corporate debt trading totalled $28.6 billion, up 10% from last quarter and down 1% compared to Q3 2003.

Trading in money market instruments totalled $1.1 trillion in the third quarter, down 34% from Q2 2004 and down 1% from Q3 2003. T-bill trading increased 12%, while trading of Bankers’ Acceptances and Commercial paper was down 10% and 3% respectively compared to the same quarter a year ago.