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Daily Market Commentary

Mixed data yesterday confused the markets a little, but in the end, it's a very quiet week and the muted reaction was short lived.  Bonds moved slightly lower on the day on very little volume.  ISM manufacturing index was low, but the prices paid was high.  That equates to slow economy, high inflation if taken at face value.  The market originally focused on the ISM number and bid higher, then turned to the prices paid and sold off.


  Fed member Poole was out yesterday saying that they still have to focus on inflation, so the probability of rates cuts ticked down by a very small amount that the market thinks is important...  Still, Fed Funds options implied probability shows a rate cut at the September meeting.  Until clearer data comes out, expect the market to churn on little tid-bits of nothing information like that which Poole gave us yesterday.



CAD$ is weaker this morning on lower crude prices.  Iran and the UK are playing friendly again (despite it being in Iran's best interest to keep a 10 or 20 dollar "risk premium" in the price of oil).  Expect the CAD$ to continue to trade more off of commodity prices that interest rates, as we are most definitely in a very stable rate environment.


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