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Daily Market Commentary

April 5, 2007

Some employment data came out this morning both sides of the border.  The Monster job index measures online job recruitment and had a very strong showing.  Canadian employment also blew away forecasts, leading me to believe the Canadian job forecasters are throwing darts rather than analyzing.  Regardless, the employment picture in Canada is strong.  As I've harped upon many times, this is the link to watch (especially in the US which comes out tomorrow), for the direction of the economy.  If employment holds up, people will not need to firesale their houses.  They can keep paying their sizable credit cards and mortgage debts to avoid any real economic fallout.

 

Bonds are slightly lower in Canada after the employment release and the CAD$ is sharply higher.  Treasuries are unchanged on the day as the weekly jobless claims number rose somewhat to 321K.  We are sitting right around monthly high yields in the treasury market (the 10yr @ 4.66%), and the market looks well sold at this point.  Payrolls numbers tomorrow will tell us whether these higher yields are justified, otherwise - the market looks somewhat oversold at this point.

 

 

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