Thursday 6 September 2012

Financial Update - September 06, 2012


The hills are alive with the sound of Outright Monetary Transactions this morning, the nickname applied to the ECB’s now-formally-announced plan to intervene in bond markets in an effort to stem the tide of rising yields in some of Europe’s over-indebted countries. The details were widely leaked over the last few days, with perhaps the only piece of the puzzle officially revealed this morning being no cap on the size of bond purchasing, essentially giving the ECB unlimited firepower. This has bond yields in countries like Spain and Italy plummeting, and stock markets soaring. The S&P500 just hit a fresh four-year high. Economic data out of the US is reinforcing the positive mood as the ISM services sector index expanded faster than forecast in August, while ADP estimated some 200,000 private sector jobs were added last month and unemployment claims dropped to a one month low. The TSX is up 131 pts. The Dow is up 237 pts.

The Loonie is in full flight along with most everything else, up almost a full penny to US$1.0182. Bond yields have jumped to 1.41% for the 5-year Canada and 1.83% for the ten. Oil is up $1.90 to US$97.26/barrel. Gold is up $15 to US$1709/oz.

Have a great day.

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