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Daily Market Commentary

Canadian employment remains strong.  While the underlying numbers show a lot of self-employment which is often in response to weak jobs markets, the tone is still positive.  CAD$ are rallying in response, but remain in their "just under par" trading range.  The unemployment rate nudged up to 6.1% as new entrants are searching for jobs.  Regionally, Ontario, Manitoba and BC were the big gainers while Quebec showed the largest decline.

 Yesterday, US wholesale inventories dropped unexpectedly (for March) as companies kept stockpiles lean in the face of slowing demand. 

The US trade balance, reported this morning, improved slightly to a deficit of $58 billion as imports slow on the back of a weaker dollar and the aforementioned slowing demand.  In Canada, we continues to post larger than expected trade surpluses, as we export anything we can pull out of the ground.  Our surplus for March was C$5.5 billion, up from C$4.8 in February.

 Credit spreads are feeling a little pressure after their month-long rally, as some big headline news puts pressure.  As you've no doubt read by now, massive losses at AIG and weak numbers from SunLife and MFC are renewing the worries in the financial sector.  The notoriously opaque investment books of the insurance companies have been able to hide the poor performance of some of the "three letter acronym" asset classes, but having such large, duration sensitive books would really force these companies into owning at least some of these products.



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