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Daily Market Commentary

Volatility continues to increase in the bond markets, as the swings in down days and up days seem to be getting wider.  Some of this is attributable to lots of speak from the central banks this week, also plenty of data and corporate actions to rock the credit markets as well.  Despite this, Treasury markets still appear to be mostly range-bound, hovering in the 5.00% to 5.20% area (10yr).


As previously noted in the launchpad, Bell spreads are rapidly moving outwards, as buyers have become scarce, and most of the banks are now refusing to make markets.  Other credit is selling out in sympathy to Bells, or perhaps fear is the more appropriate term.  At the same time, the rapid increase in the cost of funds is starting to make future leveraged buyouts look less likely.  There may be some opportunities developing in the higher quality corporates as a result.


CAD$ continue to be strong, regaining its strength after selling on the Tuesday BoC announcement.  Strong Int'l Merchandise Trade numbers out of Canada and robust housing numbers have led to a stronger loonie this morning.


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