After testing thirty year highs, the Canadian dollar headed lower today. The pair is experiencing little event risk this week, especially after Canadian markets were closed yesterday and US markets will be closed tomorrow. However, next week the Bank of Canada will be faced with a rate decision which could ignite some volatility. Interest rate futures continue to price in two rate hikes by year end, reflecting the hawkish speculation circling the Bank of Canada. The USD/CAD was most recently quoted at 1.0615.
Too much rain in Canada has the Canadian Wheat Board predicting an increase in wheat by 50 cents a bushel - the highest in five years.
http://www.cbc.ca/money/story/2007/07/02/wheat-prices.html
[I]Source: CBC[/I]
One of the biggest complaints directed at Michael Sabia, CEO of Bell Canada Inc., is that Bell share prices are too low. The tides have turned after a buyout agreement by Ontario Teachers? Pension Plan; Canada Bell shares will be trading at $42.75, an acquisition valued at $51.7 billion.
http://www.canada.com/nationalpost/financialpost/story.html?id=1364ff9d-370a-48c1-90b3-f621023eff7e
[I]Source: Financial Post[/I]
Teck Cominco Ltd., the world’s second-largest zinc producer, placed a C$4.1 billion bid for Aur Resources Inc. in an attempt to increase their annual copper output by 43%. Teck Cominco planed to split the buyout cost between stock and cash.
http://www.bloomberg.com/apps/news?pid=20601082&sid=aNjtSGgjC154&refer=canada
[I]Source: Bloomberg[/I]
[B]Currency Markets: CAD[/B]
After testing thirty year highs, the Canadian dollar headed lower today. The pair is experiencing little event risk this week, especially after Canadian markets were closed yesterday and US markets will be closed tomorrow. However, next week the Bank of Canada will be faced with a rate decision which could ignite some volatility. Interest rate futures continue to price in two rate hikes by year end, reflecting the hawkish speculation circling the Bank of Canada. The USD/CAD was most recently quoted at 1.0615.
[B]Equity Markets: S&P/TSX Index[/B]
The S&P/TSX hit the ground running today as the index is up over 100 points after yesterday?s national holiday. Equities continued its advance after Friday?s 190.90 push, led by news of BCE Inc.?s and Aur Resources Inc.'s takeovers. Today, BCE share were up C$1.26 and Aur Resources gained C$10.25. The S&P/TSX was most recently quoted down up 109.52 points at 14,016.09.
[B]Fixed-Income Markets: 10-Year Canadian Government Bonds[/B]
Today, yields increased amid hawkish speculation as interest rate futures forecasted a strong probability of a rate hike next Tuesday. Recently, Canadian investors have been risk averse, following the US bond market?s lead due to sub-prime mortgage scares. As investors pick up their confidence with a growing economy, bond prices begin to fall. The 10 year government was most recently quoted at 96.030 with a yield of 4.54.
