The USDCAD tested 1.0750 today as the Canadian Dollar came under pressure. Speculation surrounding Bank of Canada rate hike has cooled considerabley as the market focuses in on expectations for tomorrow?s inflation data.
RBC reported that houses have become less affordable due to the rising prices on houses. House payments can take up to 44% of a household?s income. The increase in the price of housing may have come about because of the influx of immigrants, causing a new demand for housing.
Source: CBC
http://www.cbc.ca/money/story/2007/06/15/houseafford.html
The bulk of Canadian securities purchases have been overseas this quarter. Almost 90% of equity purchases have been in European capital markets. Combined with the rest of overseas security purchases, it makes up a total $13.2B in outflow.
Source: Financial Post
http://www.canada.com/nationalpost/financialpost/story.html?id=91466775-caa0-42e7-8fca-79c99fb2d09a&k=2047
The Canadian TSX equity index continues to push forward today, moving higher than the record high June 4th. The TSX moved up to over 14,206 today which is following scares of rising interest rates and bond yields.
Source: Stockhouse
http://www.stockhouse.ca/news/cpnews.asp?newsid=8343628
[B][U]Canadian Market Activity[/U][/B]
[B]Currency Market[/B]
The USDCAD tested 1.0750 today as the Canadian Dollar came under pressure. Speculation surrounding Bank of Canada rate hike has cooled considerabley as the market focuses in on expectations for tomorrow?s inflation data. The Canadian Core CPI, which is announced tomorrow, is expected to slow to 2.2% pace which would be a significantly lower figure than last months 2.5%. The forward rate curve has not afforded too much to expectations since it is still pricing in a considerable probability for a hike by the end of the year.
[B]Equity Market[/B]
The TSX had a big day reaching an all new high of 14,206, higher than the previous record high set on June 4th. The rise in price of copper and oil has helped to drive big energy and raw-material companies such as EnCana Corp. Inc. and Golden Chalice Resources Inc. to higher prices and in turn taking the benchmark index with it. EnCana rose .44% along with an increased demand in oil and Golden Chalice Resources Inc. advanced 6.38% on the announcement of the discovery of copper and nickle on their Timmins, Ontario property. This was the fourth consecutive day that the TSX has closed higher than the previous day.
[B]Fixed-Income Market[/B]
The Canadian 10-yr benchmark dropped to C$95.31 today as its yield reached a high of 4.65%. Bond prices have been falling rather consistently for the past month. This could change tomorrow as the Core Consumer Price Index is expected to report an easing inflation rate which could curb expectations for a rate hike from the BoC and subsequently send 10-yr prices higher.
