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Daily Market Commentary

 Despite all the stories coming out about failed financings and structures of debt that are not attracting bidders, higher quality companies issuing straight debt are still able to sell bonds in yards.  Yesterday Hydro One (the privatized portion of Ontario's electricity complex) was able to sell just under a billion of 3 and 10 year notes.  HYD1 is almost utility like, in that investors see it almost as a provincial obligation (much like the airport authorities), but still the deals were well oversubscribed.  It follows the trend that there is still plenty of demand for plain vanilla bonds from quality issuers.

 

 

In Canada, bank earnings are the main focus of the morning, we will let Scott focus on those (keep your eye on Brad Smith's commentary to the banks' numbers).  The bond markets will be paying closer attention to more testimony from Bernanke.  Yesterday's Fedspeak boiled down to - The FOMC is more worried about the economy than inflation.  We will see what today brings.

 

 

US GDP hit the tape.  Fourth quarter came in at 0.6%, slightly lower than expectations and flat to Q3.  We don't really care what the textbook definition of a recession is, but two quarters in a row of 0.6% is pretty close.  Of more concern is that initial jobless claims came in greater than expected (as did continuing claims), continuing to tick up.  While it's a weekly number and can be lost in the noise, the trend in jobless numbers is definitely higher.  If this trend keeps up, inflation will be the last thing on policy makers minds.

 



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