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Daily Market Commentary

Bonds are higher this morning, as housing data continues to pour in negative.


Yesterday's new home sales disappointed as much as Monday's existing home sales, and this mornings MBA mortgage applications came in negative again for the third week in a row.  US durable goods orders were very weak this morning, although April's data was revised upwards.  This has put a decent bid under the Treasury market, and the Ten Year bond is trading at 5.03%. 


This is the test of the psychological 5% mark we were looking for after the seriously oversold conditions in the bond market.  Remember, the yield hit an intra-day high yield north of 5.30% only two weeks ago.  All this movement is being reflected in the volatility indicators like the VIX, which has been climbing significantly over the past couple of weeks.  Canada bonds are following suit, the CAD ten year now at 4.56%


  The only market that hasn't been volatile lately, surprisingly, has been the CAD$.  The Loonie has been stuck around the 1.0700 level for several days with no clear direction.  We'd call this a consolidation from the recent run-up.  This is technically very bullish for the CAD$, as the fast rise was not met with serious selling once it got to the overbought stage.  It is only 1.2 cents off of it's high of early June after a rally of over a dime.


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