Canada?s pre-GDP release excitement proved enough to cause a reversal in the recent Canadian dollar decline against the Greenback. However, when Canadian growth missed the 0.4 percent forecast at 0.3 percent, the Loonie continued its retreat. Helping move GDP from April?s stagnant report, last week?s robust retail sales were counteracted by declines in other sectors such as energy, leaving GDP with only a modest increase.
The Canadian economy grew 0.3 percent, slightly missing analysts? 0.4 percent forecast. Stronger retail and wholesale sales were able to pick up Canada?s GDP from last month?s no-growth print.
http://www.canada.com/nationalpost/financialpost/story.html?id=6eaafe8a-8077-4420-8a95-e1ab1e399cfd&k=17368Source: Financial Post
Takumi Stamping announced its plan to build a factory in southwest Ontario that would add 100 new jobs. The first stage of the investment is valued at $14 million which will be followed by a second stage projected to double the value of the company.
Marathon Oil Corp. has agreed to acquire Western Oil Sands Inc. for $5.8 billion. As overseas oil is being limited by countries such as Russia and Venezuela, oil companies are looking to purchase Canadian crude deposits, estimated as the biggest outside Saudi Arabia.
[B]Currency Markets: USDCAD[/B]
Canada?s pre-GDP release excitement proved enough to cause a reversal in the recent Canadian dollar decline against the Greenback. However, when Canadian growth missed the 0.4 percent forecast at 0.3 percent, the Loonie continued its retreat. Helping move GDP from April?s stagnant report, last week?s robust retail sales were counteracted by declines in other sectors such as energy, leaving GDP with only a modest increase. With nothing slated on Canada?s docket until Friday, investors will watch for news from the United States to drive the USDCAD. The pair was most recently quoted at 1.0670.
[B]Equity Markets: S&P/TSX Index
[/B]The S&P/TSX index moved higher for the second day after last week?s credit scares carved off 5.7 percent of the index. Energy companies filled the leading index movers? slots as oil jumped back over $77/bbl. Taking the lead, Suncor Energy Inc. rose $3.70 to $98.60 on the announcement of a new oil sands expansion project, followed closely by EnCana Corp., increasing $1.72 to $66.10. Additional gains were seen as Western Oil Sands Inc. agreed to be taken over by Marathon, causing its shares to grow $2.97 to $37.10. Commodities including oil account for almost half of Canadian exports. The S&P/TSX was last quoted up 95.87 points at 13,960.59.
[B]Fixed Income Markets: Canadian Government 10-Year Bond[/B]
The Canadian 10-year bond yield fell as Canada?s GDP report indicated that the economy grew less than forecast in May. Earlier this month, the Bank of Canada increased the overnight lending rate 25 basis points to control their above-target inflation rate. As economic indicators show some signs of slowing growth, Governor Dodge?s need for another “modest increase” may be put on hold, encouraging investments in the bond market. The Canadian government 10-year bond was most recently traded at 96.020, yielding 4.54.