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Daily Market Commentary

Remember ABCP?  Ya - it was almost a year ago that the market imploded for 3rd party ABCP.  The Ontario court that is overseeing the restructuring of the programs had outlined part of the solution to protect the dealers that jammed  sold the paper.  Well, a few parties who are still long their September 2007 maturity paper are appealing that decision before the restructuring is complete.  Needless to say, the big dealers, who have committed to make the small investors whole (but not the bigger ones, who are holding out), are all for the plan.  Expect a decision from the appeal court next week.

  Interestingly, the Bank sponsored ABCP, which some of you may have owned at some point (as we sold it) is still trading, currently about 25 bps over Bankers Acceptances  (that is NOT a recommendation)

Canadian CPI came out early this morning, rising more than expected to 2.2% in the headline and 1.5% core.  Just like our neighbours, our core prices remain in check while the headline gains steam.  Fortunately, we have a strong currency which pushes our CPI to 2.2% while the US, with their weak dollar, is running at 4.2%.  Broken down by region, PEI and NS experienced the most gains, while Alta, Man and Sask were light.

By sector, big gains in transportation, recreation and food were offset by declines in clothing and household operations.



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