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Daily Market Commentary

 Domestic Fixed Income markets are quiet to start the week.  We won't see any data until 10 am when the ISM manufacturing index comes out.  This important activity survey compares current month orders with the previous month, so it shows trend in factory activity.  It has dropped below the boom/bust 50 line and is expected to stay there for now. 

The Ten year Treasury is holding above 4% for now (Cdn is at 3.70%).  We are wondering if the recent outperformance in Canada will give up now.  Since Canada (and many provinces) issue bonds which coupon payments and maturities to June 1 and Dec 1, there is generally a strong bias to buy leading into those coupon payment periods.  That period is done now, except for those very few who wait until the cash is actually in their account (and therefore lose a few days interest) before re-deploying it.  Perhaps now we should see the US catch up, or more appropriately, Canada drop? 

Looking ahead on the calendar, it's jobs week.  Thursday here and Friday in the US we will see how employment is holding up.



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