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Daily Market Commentary

Bonds rose on weak Canadian leading indicators yesterday, and the Bank of Canada came and went without much fanfare.  As mentioned in Monday's comment, they erred on the side of inflation but left the door open to move in either direction should the data steer them there.  Also mentioned, Dodge didn't say anything about our recent dollar strength.  He's probably happy to let it do the work of a rate hike as it creeps higher and slows down our export led economy.

 

  Bonds liked the news, and traded up for the second day in a row.  The CAD$ also held onto it's gains, although currency traders were looking for a further hint of overnight rate hikes.  It's nice to be paid to hold onto a currency (which is why Aussie o/n @ 6.25% and Kiwi o/n @ 7.50% dollars have had such incredible strength lately).

 

  This morning, a strong, but mostly ignored durable goods numbers hit the tape.  Bonds were leaking lower before the news and are mostly unchanged since it came out.  New Home Sales are reported at 10 am, which follow up yesterday's brutal existing home sales numbers of -8.4% month over month.  Perhaps we seeing the second leg of the housing triple waterfall decline.  One thing is certain, while the severity of any further declines is unknown, the housing pain is not over yet.

 

 



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