Monday, April 13, 2009

Economy Turnaround Indicators - Market Report

Read Article Below to learn about some Canadian indicators for the economic turn around coming soon....

Canada's Currency Gains Amid Speculation Slump May Be Easing - April 10 (Bloomberg)
The Canadian dollar strengthened for a second consecutive week amid rising commodity prices and signs that the slump in the world's eighth-largest economy may be easing.
Canada's dollar, known as the loonie, increased 0.5 percent for the week, which was shortened by the Good Friday holiday. The nation unexpectedly posted a trade surplus, and monthly job losses were lower than some strategists anticipated. Commodities, which accounted for 56 percent of Canadian export revenue last year, advanced as investors sought riskier assets.
The currency rose to C$1.2237 per U.S. dollar yesterday in Toronto, touching a two-week high of $1.2212. It traded at C$1.2298 on April 3. One Canadian dollar buys 81.72 U.S. cents.
"The loonie seemed to be a distinct outperformer," said Sacha Tihanyi, a strategist in Toronto at Scotia Capital Inc., a unit of Canada's third-largest bank. "We got upside surprises with the data, so that helped."
The Canadian currency tends to track fluctuations in stocks and commodity prices.
Stocks rose, with the Standard & Poor's 500 Index climbing 3.8 percent yesterday to cap a fifth consecutive week of gains. Crude oil for May delivery climbed as much as 6.2 percent yesterday. It finished the week little changed from the five days ended April 3, which saw the commodity's fifth weekly jump. Copper futures posted the fourth week of advances.
Market Signal
The loonie, after touching a four-year low of C$1.3064 on March 9, strengthened as investors ventured out of haven currencies like the U.S. dollar and the Japanese yen to purchase riskier assets such as stocks and commodity-linked currencies.
"Generally the fall in commodity prices seems to have stopped," said Aaron Fennell, a Toronto-based futures and currency broker at MF Global Canada Co., a unit of MF Global Ltd. "One textbook indicator in our business is when you have bad news and the market climbs anyway -- usually that's a signal that a market is ready to turn around."
Canadian employers eliminated a net 61,300 jobs, Statistics Canada said yesterday in Ottawa. While economists surveyed by Bloomberg forecast employment would fall by 50,000, the "whisper numbers," or unofficial predictions among traders, called for more severe cuts, Scotia Capital's Tihanyi said.
Canada's dollar will weaken to C$1.26 against the greenback by the end of this quarter before rebounding to C$1.16 in 2010, according to the median forecast in a Bloomberg survey of 38 economists.
Trade Surplus
Government bonds returned 0.2 percent to investors this week, according to Merrill Lynch & Co. indexes. The two-year benchmark security's yield rose three basis points yesterday, or 0.03 percentage point, to 1.12 percent. The price of the 1.25 percent security due in June 2011 dropped 6 cents to C$100.28.
Canada posted a trade surplus of C$126 million ($102 million) in February on shipments of cars and airplanes, Statistics Canada said yesterday. Economists forecast a deficit of C$1.2 billion, according to the median of 23 estimates in a Bloomberg News survey.
The loonie was the fifth-best performer this week against the greenback among the most actively traded currencies tracked by Bloomberg. The Australian dollar was fourth, rising 0.6 percent. Like Canada's currency, it tends to track swings in commodity and equity prices. Mexico's peso was the week's best performer, appreciating 3.6 percent]By Chris Fournier

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