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Market Commentary

July 6, 2011

Following the steep selloff in the bond market last week, it was not surprising to see a bit of a bounce early this week but the rally has picked up steam due to some key global factors. Front and center was the third rate hike of the year in China – tighter lending conditions in a key cog in the global recovery does not bode well for risk assets – which is helping drive funds back into bonds.

 

Also, Moody’s four-notch downgrade of Portugal to Ba2, a non-investment grade rating level, reminded everyone that the Eurozone fiscal troubles run well beyond Greece and were not permanently solved last week.

 

The rest of the week will be pretty eventful with respect to data. For Canada, the Employment Report for June will be released Friday. For the US, we have: ADP Employment (Thu); Employment Report, Wholesale Trade, Consumer Credit (all Friday).


by First National Financial LP 6. July 2011 05:07

January 19, 2011

Generally weak data was released in North America this morning. For Canada, Manufacturing Sales growth of -0.8% in November fell well short of the +0.3% reading the market had been expecting. The slide was caused entirely by a decrease in the motor vehicles / parts segment.

 

For the US, Housing Starts for December at 529k annualized were also weak, but there was a strong pickup in building permits, and some weak results released by some US financial institutions this morning are also weighing on the market.

 

Balancing off these generally disappointing items are strong earnings results in the tech sector and decent results in the latest auction of Portuguese debt.


by First National Financial LP 19. January 2011 09:44

January 12, 2011

This morning’s selloff in the bond market is largely related to encouraging political support for the Euro crisis du jour – Portugal – along with a relatively successful auction of Portuguese bonds this morning (the yield on the ten year bonds was “only” 6.71%).

 

In terms of data, Thursday and Friday will be relatively important:

Canada: Trade Balance (Thu)

USA: PPI, Initial and Continuing Jobless Claims (Thu); CPI, Capacity Utilization & Industrial Production, Consumer Sentiment, Business Inventories (Fri).


by First National Financial LP 11. January 2011 09:42