Canadian Market Update
The loonie didn’t find much support in this morning’s data, as June producer prices — up 1.3% — rose less than the surge in raw material costs (4.4%), a sign that manufacturers aren’t passing higher energy costs on to consumers yet.
The loonie weakened against USD following the news but saw little movement against most other majors and will be looking to tomorrow’s GDP release for direction.
USD/CAD is down 9 pips to 1.0229, while EUR/CAD is moving sideways in a very narrow range just below its 9- and 21-day moving averages. EUR/CAD is currently down 24 pips at 1.5935. CAD/JPY is up 9 pips at 105.68.
Canadian bonds nearly flat with 10yr yield up 1bp to 3.80%, and the 2yr yield down 1bp to 3.05%.
The S&P/TSX is on a roll, up 1.4%, led by financials — which have rallied since Monday — as well as energy and materials stocks. RBC is up 1.3% and Teck Cominco has added nearly 8%. The TSX is up 190 points to 13,532.