The bond market has rallied a touch compared to yesterday’s close, likely due to a number of factors.
US data betrayed that country’s difficulty in maintaining forward momentum. Industrial Production for May was up 0.1% (market expected +0.2%), while Capacity Utilization was stagnant at 76.7% (same as April, and lower than expectations for 77.0%). Also, the Empire Manufacturing Index, a survey of manufacturers in a variety of industries, came in at -7.79 (market expected +12.00; positive numbers indicate expansion, negative readings indicate contraction), only the second negative reading in two years. In aggregate, these US numbers are bearish.
US Inflation Year over Year was a bit higher than expected (3.6% vs. 3.4%), primarily due to rising energy and food costs (excl. Food & Energy, CPI grew 1.5% vs. exp. of 1.4%). Of course, this reduces discretionary spending, which in turn hinders the recovery.
In Canada, Manufacturing Sales growth of -1.3% for May ‘beat’ expectations of -1.4%.
Globally, civil disobedience in Greece is getting a lot of airtime today as that country’s leaders debate the merits of the austerity-for-cash offer made by the EU/IMF/ECB. In combination with disagreements between Germany and the ECB as to who bears the costs of such a bailout means that the resolution of the situation remains disappointingly uncertain.
Tags: Industrial Production, Capacity Utilization, Empire Manufacturing Index, US Inflation, Manufacturing Sales, Commercial, Mortgages, Financing, Lending, Apartment, CMHC, Vancouver, Calgary, Toronto, Montreal, Halifax