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Daily Market Commentary

Thud. That is the sound of retail sales in the US falling off a cliff, down .9% versus consensus of -.1% and ex-autos down .4% versus expectations of +.2%. The US dollar had been mounting a small rally but this news has put a halt to that. In addition, the European Central Bank reiterated that interest rates are too low and so the Euro is refirming.


 The Bank of Canada said yesterday that inflation in Canada is headed for a 3% peak and will fall more slowly to 2% than previously forecast.


Therefore, global short term rates, with the exception of the US, are headed higher. The US can ill afford higher rates as the sub prime mess deepens.


On the domestic front, the market for Bell Canada bonds remains sloppy, with wide bid/ask spreads and very little buying. A group of Bell bondholders has retained counsel in preparation for a duke out with respect to having their bonds redeemed instead of being reduced to junk.


Bond prices have ticked up by ?  after the retail sales number.


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