Daily Market Commentary
May 10, 2007
The Fed's statement yesterday came in more or less as expected. Rates unchanged and the Fed still watching inflation. The ECB also left rates unchanged @ 3.75% and the Bank of England hiked, as expected, to 5.50%.
Back on this side of the pond today, we saw US Trade deficit increase to $64 bil, as the rate import price inflation slowed somewhat (although still more than expected). Traders are getting used to massive trade deficits, and this hasn't had much effect on the bond markets, which remain more or less unchanged today. Watch for PPI tomorrow morning as the more important number of the week.
The CAD$ is weak again today, partly on technicals, and partly on our weaker than expected balance of trade numbers this morning.