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.
No comments:
Post a Comment