Canada’s gross domestic product for February beat expectations, growing by 1.7% on an annualized basis.  Forecasts had called for a 1.3% rise.  Seasonally adjusted GDP also beat forecasts rising 0.3%.  Growth was widespread and was led by the resource sector.

North American markets opened mixed and appear to be taking a breather while they wait for central bank policy announcements from the U.S. and Europe.  The Fed is expected to stand pat and the ECB is expected to cut its rate.  European unemployment has hit a new record high of 12.1% and inflation has tumbled to 1.2%.   

Bond yields are down 1 bps.

In the U.S., the Case-Shiller home price index for February clocked-in with its ninth straight gain, rising 0.3% over January.  The year-over-year increase comes in at 9.3%.

And U.S. consumer confidence as measured by the Conference Board climbed more than expected in April, rising to 68.1 – an increase of more than 6 points from March.

This is going to be a busy week with a lot of market moving data.  Both the U.S. and the EU will be making policy announcements.  The European Central Bank is widely expected to cut its benchmark rate.  The U.S. will also be issuing its employment data for the month and there are a couple of housing reports coming as well.   Ottawa will be releasing February GDP numbers.

North American markets appear to be following the rest of the world, opening higher this morning on anticipation of a European rate cut.  Bond yields are down 1 – 2 bps.

One of those U.S. housing reports hit this morning.  Pending home sales rose more than expected in March.  The National Realtors Association says the number of contracts signed for a home sale in the future climbed 1.5% over February.  The index is up 7% compared to March a year ago.

The key release for today is the read on Q1 GDP out of the United States.  Growth accelerated at an annualized rate of 2.5%, driven by strong consumer spending.  Expansion didn’t hit the 3% expectation, but is a significant rebound from Q4’s anaemic 0.4% growth.      

Despite the improvement the results appeared to dampen North American equities at the open.

Bond yields are down 2 – 3 bps.

And U.S. consumer sentiment dropped in April.  The University of Michigan index fell about two points to 76.4.  That’s the lowest level in three months, but not as bad as expected.  Consumer optimism has waned a little as well; the expectations index dropped three points.

North American markets got off to another upbeat start today.  Investors appear to have re-grouped after yesterday’s initial enthusiasm evaporated.  The TSX benefited from a rebound in commodities. 

Bond yields are up 1 bps.

The only North American economic report of note today is the weekly read on first time jobless claims in the U.S.  The latest number fell by 16,000 – dropping to a five year low and well beyond expectations.  The four-week rolling average fell by 4,500.

Overseas offers a mixed bag of data:

Spanish unemployment rose to its highest level in nearly 40 years.

Britain’s economy dodged a return to recession and grew faster than expected in Q1.

The European Central Bank is widely expected to lower its benchmark interest rate by a quarter of a percent at its next setting.

North American equities maintained their buoyant attitude at the open today, apparently bolstered by generally positive corporate results.

The only economic report of note today is the read on U.S. durable goods sales so markets will likely continue their focus on earnings as they look for direction.

Bond yields are up 2 – 4 bps.

The durable goods report shows March sales slumped 5.7% and February sales were revised slightly downward.  The March decline was led by orders for commercial aircraft.  Even with the volatile transportation component removed March sales were unexpectedly down by 1.4%.

Orders for non-defence capital goods excluding aircraft – a proxy for future business investment – rose just 0.2 percent, failing to make up for a 4.8 percent slump in February.

Markets opened higher this morning carrying on the trend from yesterday’s close.  Investors appear upbeat about corporate earnings despite signs of weakness coming out of China and Germany.  Business activity in Germany actually shrank for the first time in five months.  In China, growth in factory activity slowed to a crawl.

Bond yields are down 1 bps.

The sole economic release for Canada this week is February retail sales.  They more than doubled expectations rising 0.8% over January.  The increase was driven by sales at gas stations and general merchandise stores.  Seven of 11 sub-sectors reported increases but sales volumes were flat.

Housing dominates in the U.S. today with the government’s house price index clocking-in with a 7.1% increase for February.  The m/m figure is up 0.7% over January.  Tightening supply, low borrowing costs and improving employment get the credit.

March new home sales in the U.S. rose 1.5% over February, just a shade better than expectations.  Year-over-year, new, single family home sales are up 17.6%.

North American equity markets began the week, down.  Investors appear to be more interested in corporate earnings than in international events.  Japan’s economic stimulus plan has been given the green light by the G20 and Italy has elected a president.  That move brings the long-running political stalemate there one step closer to resolution.

Bond yields are unchanged.

This will be a quiet week for Canadian data.  The only report of note will be tomorrow’s release of the February retail sales figures.  The key release out of the U.S. comes on Friday with a read on Q1 GDP. 

There are also some housing reports out of the U.S. starting today with existing home sales for March.  The National Association of Realtors says sales edged down 0.6% last month, missing expectations for a modest increase.  Year-over-year the average price for a home is up 11.8%.   

Tomorrow the U.S. government releases its home price index for February and new home sales for March.

The markets appear to be recovering their taste for risk.  North America equities had a mixed open as we wind-down a volatile week.

Bond yields are unchanged.

Just two reports of note on the data calendar today, both from Canada.  The consumer price index for March increased by a modest 0.2% compared to February.  That translates to 1% inflation on a year-over-year basis, down from 1.2% in the previous month and just shy of the 1.1% forecast.  Core inflation comes in at 1.4% y/y.

Canadian wholesale trade was unchanged in February at $48.8 billion.  Strong vehicle sales offset declines in 5 of 7 subsectors.  Wholesale volumes were stable.

North American equity markets opened the day mixed; a soft start in a week that has been marked by some very hard up and down moves.  It’s also a light day for data so traders won’t have much to give them direction.  Most appear to be taking some heart from, generally, better-than-expected corporate earnings and a, generally, positive Beige Book.

Bond yields are mixed, ranging from +1 to -2 bps.

The key report for the day comes from the U.S.  Weekly, first-time, jobless claims rose by a modest 4,000.  The four-week rolling average is up about 2,700.

Canadian consumer inflation and wholesale trade numbers are out tomorrow.

Markets appear headed for another dip today.  North American equities opened lower following Tuesday’s enthusiastic bargain hunting.  Investors appear to be waiting to hear what the central banks have to say.

Bond yields are down 2 – 3 bps.

The Bank of Canada has done what was expected.  For his last policy announcement before moving on to the Bank of England, Chairman Mark Carney downgraded expectations and maintained the 1% benchmark interest rate.  2013 growth is being knocked back a half-a-point to 1.5%.  Inflation is expected to remain low into 2015 which may have lead to a modest softening of the Bank’s language on impeding interest rate hikes.

The U.S. Fed’s Beige Book is out this afternoon.

Canadian home prices rose modestly in March, compared to February.  The Teranet Home Price Index was up 0.4% m/m.  It’s the first increase in the 11 city composite in seven months.  Year-over-year the index is up just 2.6%.