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Daily Market Commentary

To those that thought the CAD$ was done, hold onto your hats.  A slightly higher print on Core CPI month over month has everyone looking back at the last jobs print and remembering that the there are lots of pressures pushing the bank to tighten, if it were only economic indicators we were looking at. In reality other forces are at play (including the lingering monster in the closet of the yet to be resolved ABCP issues), and the Bank can afford to stand pat.  The dollar, however, is not sitting back.  Shooting higher by almost a penny this morning, we are now trading around 0.9660 (1.0350 to those of you who speak backwards).


Higher prices in the CPI were reported mostly in women's clothing and education (New September tuition fees kicking in?), as well as autos (which we wouldn't expect to last, given how many people we know crossing the border to buy a car).


  While the story hasn't been in the bond markets for some time now, there has been a lot of action there.  Plenty of corporate issuance, especially by the banks, in the last few weeks is keeping corporate spreads wide.  Some volatility in the equity markets is doing the same.  It seems that corp spreads want to stay wide here, no matter what news comes out.



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