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Daily Market Commentary

There is not a lot to add to yesterday's commentary given the slow pace of trading in the Canadian markets yesterday.


We are waiting for the Bank of Canada at 9 am, as well as some home price data from the US.  Until then we are drifting around without much direction in the bond market.


We are expecting David Dodge to reiterate the Bank's position that rates are appropriate where they are for the time being, but they will be bias to fighting inflation in our persistently strong economy.  So far, he has declined to comment on the strength of the dollar.  Any more hints at raising rates, however, could send our dollar shooting even higher than it already is.  It is a delicate position, with plenty of inflationary pressures in the western provinces (housing, wage, energy, food) offset by disinflationary pressures in the manufacturing centres of the country brought on by slimmer export margins.  A believer in the markets deciding the rate of dollar exchange, Dodge will most likely release a benign statement keeping rates unchanged and not rocking the boat.


Update to come at 9am.


Before the news, US and CAD dollars are both trading lower across the world, especially against Euros and Yen


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