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Daily Market Commentary

Was is Dovish or Hawkish?  Depending on who you talked to, the Fed's statement read either way.  The upshot of this?  As we suspected, the Fed will be on hold for some time to come.  Watching both inflation indicators and economic performance to be ready to act in either direction.  We read the statement as being more concerned about growth, compared to the last meeting. 

We would be more confident that the next move will be lower, except that Fed funds is already at a very accomodative 2.00%, and the general consensus was that the prolonged period of sub-2 percent rates from December 31 2001 to November 9, 2004 pretty muched caused lenders and bankers to run wild like kids on a sugar high.

What does this give us?  More of the same - "Muddle Through" to borrow a phrase from John Mauldin (who is worth reading, by the way).

This morning, Canada's Ivey Purchasing Managers index will be released at 10am.  Similar to the US ISM index, ours has maintained an expansionary reading for some time, and has actually been trending higher in 2008.  Despite this, the CAD$ is holding around yesterday's lows, having dropped significantly over our long weekend.

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