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Daily Market Commentary

There is a dearth of economic news this morning with the initial jobless claims continuing to rise, this week to 338,000.


On the Central Bank watch, New Zealand and Australia kept their rates unchanged. However, the Bank of England, citing falling house prices, a weak inflation outlook and the spreading credit crunch, lowered its key rate by 25 beeps to 5.5%. Across the Channel, the European Central Bank(ECB) left its rate unchanged at 4% and, in a hawkish release, warned of higher inflation and lower growth. It is difficult to imagine that the EU can remain impervious to developments in the rest of the globe.


 The US dollar has been a beneficiary of several factors lately, such as falling oil and gold prices and narrowing deficits and is mounting a tidy year end rally. The Loonie is the other side of this coin with a 1.1050 handle this morning. Technicians think it could fall to 1.0250 before settling.


Now the market focus turns to tomorrow's employment news and bond prices are heading lower for the second straight day.


 The rest of today will feature an endless parade of talking heads discussing the freeze on sub prime mortgage interest rates.


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