Morning Market Recap: Canadian Dollar Down, Bonds Up Following May Retail Sales

Market Updates | Written by CEP News | Jul 22 08 13:06 GMT |

(CEP News) - A lower-than-expected May Canadian retail sales report on Tuesday pushed the country's bond prices higher and dollar down against major foreign currencies. Economists were expecting sales excluding autos to increase 0.7% in the month due to higher gasoline prices, but sales were only 0.4% higher. The miss was mitigated somewhat because April's figure was revised to 1.2% from 1.1%. Including autos, retail sales increased 0.6%, but that number falls to 0.1% if gasoline station sales are excluded. The Canadian dollar is down 0.0057 to 0.9945 against the U.S. dollar (1.0056 USD/CAD) and down 0.31 to 106.15 against the yen. Yields on two-year Canadian government bonds are down 1.6 bps to 3.16%, with five-year yields down 1.7 bps to 3.40%, 10-year yields down 0.9 bps to 3.81% and 30-year yields flat at 4.15%. The Canadian 10-year note is yielding 27.1 bps less than the U.S. 10-year note. U.S. equity futures are pointing to losses at the open after several companies reported lower-than-expected quarterly results. Wachovia announced a $8.9 billion loss and slashed its dividend by 87%. American Express and Texas Instruments missed estimates while Apple lowered guidance. U.S. equity market futures are lower with contracts on the Dow Jones industrial average down 68 points to 11397, the S&P 500 down nine points to 1253 and the Nasdaq down 31 points to 1797. European stock markets are also lower, with the Eurostoxx down 46 points to 2805, the UK FTSE 100 down 86 points to 5319 and the German DAX down 63 points to 6362. Asian markets were mixed, with the Japanese Nikkei closing up 381 points to 13185 and the Hang Seng Index closing down five points to 22527. U.S. two-year yields are up 4.9 bps to 2.64%, with five-year yields up 4.2 bps to 3.41%, 10-year yields up 3.5 bps to 4.08% and 30-year yields up 4.3 bps to 4.66%. In Germany, returns on two-year German bonds are down 5.2 bps to 4.57%, with five-year yields down 3.8 bps to 4.63%, 10-year yields down 0.6 bps to 4.63% and 30-year yields flat at 4.87%. Yields on UK two-year bonds are down 5.3 bps to 5.05%, with five-year yields down 5.2 bps to 5.01%, 10-year yields down 4.4 bps to 5.01% and 30-year yields down 2.7 bps to 4.64%. The U.S. dollar is up 0.30 to 106.74 against the yen and the Dollar Index is down 0.097 to 71.893. The euro is down 0.0036 to 1.5886 against the U.S. dollar, up 0.0051 to 1.5972 against the Canadian dollar, down 0.0004 to 0.7943 against the pound sterling and is higher by 0.10 to 169.58 against the yen. The pound sterling is down 0.0033 to 2.0000 against the U.S. dollar and up 0.0074 to 2.0107 against the Canadian dollar. WTI crude oil is down $1.72 to $130.10. The front month gold contract at the Chicago Board of Trade is up $5.60 to $969.70 per ounce. All data taken at 8:55 a.m. EDT. By Adam Button, abutton@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, ngirgis@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News. A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.