Economic Calendar Summary 7/20 - 7/25

Sunday, Jul 20, 2008

GMT	Ccy	Events	Consensus	Previous
22:45	NZD	Visitor Arrivals (JUN)	--	9.4%
23:01	GBP	Rightmove House Prices (MoM) (JUL)	--	-1.2%
23:01	GBP	Rightmove House Prices (YoY) (JUL)	--	0.1%

Monday, Jul 21, 2008

GMT	Ccy	Events	Consensus	Previous
1:30	AUD	Producer Price Index (QoQ) (2Q)	1.6%	1.9%
1:30	AUD	Producer Price Index (YoY) (2Q)	5.3%	4.8%
1:30	AUD	New Motor Vehicle Sales (MoM) (JUN)	--	-1.6%
1:30	AUD	New Motor Vehicle Sales (YoY) (JUN)	--	2.6%
3:00	NZD	Credit Card Spending (YoY) (JUN)	--	5.9%
7:00	CHF	Money Supply M3 (YoY) (JUN)	--	2.6%
7:00	CHF	Real Estate Index Family Homes (2Q)	--	340.4
7:15	CHF	Producer & Import Prices (MoM) (JUN)	0.5%	1.2%
7:15	CHF	Producer & Import Prices (YoY) (JUN)	4.4%	3.9%
14:00	USD	Leading Indicators (JUN)	-0.1%	0.1%
23:50	JPY	All Industry Activity Index (MoM) (MAY)	0.4%	0.8%

Tuesday, Jul 22, 2008

GMT	Ccy	Events	Consensus	Previous

Wednesday, Jul 23, 2008

GMT	Ccy	Events	Consensus	Previous
1:00	AUD	DEWR Skilled Vacancies (MoM) (JUL)	--	-0.1%
1:30	AUD	Consumer Prices (QoQ) (2Q)	1.3%	1.3%
1:30	AUD	Consumer Prices (YoY) (2Q)	4.3%	4.2%
1:30	AUD	Reserve Bank of Australia Trimmed Mean (QoQ) (2Q)	1.1%	1.2%
1:30	AUD	Reserve Bank of Australia Trimmed Mean (YoY) (2Q)	4.2%	4.1%
1:30	AUD	Reserve Bank of Australia Weighted Median (QoQ) (2Q)	1.1%	1.3%
1:30	AUD	Reserve Bank of Australia Weighted Median (YoY) (2Q)	4.4%	4.4%
6:45	EUR	French Consumer Spending (MoM) (JUN)	-0.6%	2.0%
6:45	EUR	French Consumer Spending (YoY) (JUN)	1.4%	3.1%
8:00	EUR	Italian Retail Sales s.a. (MoM) (MAY)	0.0%	0.0%
8:00	EUR	Italian Retail Sales (YoY) (MAY)	-0.4%	-2.3%
8:30	GBP	Bank of England Minutes	--	--
8:30	GBP	BBA Loans for House Purchase (JUN)	--	27968
9:00	EUR	Euro-Zone Industrial New Orders s.a. (MoM) (MAY)	-1.0%	2.5%
9:00	EUR	Euro-Zone Industrial New Orders (YoY) (MAY)	3.2%	11.7%
10:00	GBP	U.K. CBI Quarterly Industrial Trends (JUL)	--	--
11:00	CAD	Consumer Price Index (MoM) (JUN)	0.5%	1.0%
11:00	CAD	Consumer Price Index (YoY) (JUN)	2.9%	2.2%
11:00	CAD	Bank of Canada Consumer Price Index Core (MoM) (JUN)	0.1%	0.3%
11:00	CAD	Bank of Canada Consumer Price Index Core (YoY) (JUN)	1.6%	1.5%
11:00	USD	MBA Mortgage Applications (JUL 18)	--	1.7%
13:00	USD	Fed's Mishkin Speaks at Bank of Canada Conference	--	--
15:15	USD	Fed's Kohn Speaks on Transparency at Bank of Canada Conference	--	--
18:00	USD	Fed's Beige Book	--	--
21:00	NZD	Reserve Bank of New Zealand Rate Decision	8.25%	8.25%
23:50	JPY	Merchandise Trade Balance Total (yen) (JUN)	506.0B	365.6B
23:50	JPY	Adjusted Merchandise Trade Balance (yen) (JUN)	270.0B	642.3B

Thursday, Jul 24, 2008

GMT	Ccy	Events	Consensus	Previous
01:00	JPY	BOJ Board Member Atsushi Mizuno to Speak in Aomori City	--	--
06:45	EUR	French Business Confidence Indicator (JUL)	100	102
06:45	EUR	French Production Outlook Indicator (JUL)	-17	-15
06:45	EUR	French Own-Company Production Outlook (JUL)	4	7
07:00	EUR	French Purchasing Manager Index Manufacturing (JUL P)	48.8	49.2
07:00	EUR	French Purchasing Manager Index Services (JUL P)	49.5	50.1
07:30	EUR	German Purchasing Manager Index Manufacturing (JUL A)	52	52.6
07:30	EUR	German Purchasing Manager Index Services (JUL A)	51.5	52.1
07:30	EUR	Italian Business Confidence (JUL)	86.5	87.1
08:00	EUR	German IFO - Expectations (JUL)	93.2	94.7
08:00	EUR	German IFO - Business Climate (JUL)	100.2	101.3
08:00	EUR	German IFO - Current Assessment (JUL)	106.5	108.3
08:00	EUR	Euro-Zone Current Account s.a. (euros) (MAY)	--	-0.3B
08:00	EUR	Euro-Zone Current Account n.s.a. (euros) (MAY)	--	-9.2B
08:00	EUR	Euro-Zone Purchasing Manager Index Manufacturing (JUL A)	48.7	49.2
08:00	EUR	Euro-Zone Purchasing Manager Index Services (JUL A)	48.8	49.1
08:00	EUR	Euro-Zone Purchasing Manager Index Composite (JUL A)	49	49.3
08:30	GBP	Retail Sales (MoM) (JUN)	-2.60%	3.50%
08:30	GBP	Retail Sales (YoY) (JUN)	4.40%	8.10%
12:30	USD	Initial Jobless Claims (JUL 19)	380K	366K
12:30	USD	Continuing Claims (JUL 12)	3200K	3122K
14:00	USD	Existing Home Sales (MoM) (JUN)	-1.00%	2.00%
14:00	USD	Existing Home Sales (JUN)	4.94M	4.99M
14:00	USD	NY Fed's Geithner; SEC's Cox to Testify Before House Committee	--	--
23:30	JPY	Tokyo Consumer Price Index (YoY) (JUL)	1.80%	1.50%
23:30	JPY	Tokyo Consumer Price Index Ex-Fresh Food (YoY) (JUL)	1.60%	1.30%
23:30	JPY	Tokyo Consumer Price Index Ex Food; Energy (YoY) (JUL)	0.40%	0.30%
23:30	JPY	National Consumer Price Index (YoY) (JUN)	1.90%	1.30%
23:30	JPY	National Consumer Price Index Ex-Fresh Food (YoY) (JUN)	1.90%	1.50%
23:30	JPY	National Consumer Price Index Ex Food; Energy (YoY) (JUN)	0.00%	-0.10%
23:50	JPY	Foreign Buying Japan Stocks (yen) (JUL 18)	--	-242.4B
23:50	JPY	Foreign Buying Japan Bonds (yen) (JUL 18)	--	528.2B
23:50	JPY	Japan Buying Foreign Stocks (yen) (JUL 18)	--	12.9B
23:50	JPY	Japan Buying Foreign Bonds (yen) (JUL 18)	--	-58.4B
23:50	JPY	Corporate Service Price (YoY) (JUN)	0.60%	0.60%

Friday, Jul 25, 2008

GMT	Ccy	Events	Consensus	Previous
7:30	EUR	Italian Retailers' Confidence General (JUL)	--	107.3
7:30	EUR	Italian Services Survey (JUL)	--	14
8:00	EUR	Euro-Zone M3 s.a. (3M) (JUN)	10.4%	10.4%
8:00	EUR	Euro-Zone M3 s.a. (YoY) (JUN)	10.3%	10.5%
8:30	GBP	Gross Domestic Product (QoQ) (2Q A)	0.2%	0.3%
8:30	GBP	Gross Domestic Product (YoY) (2Q A)	1.6%	2.3%
8:30	GBP	Index of Services (3Mo3M) (MAY)	0.4%	0.3%
12:30	USD	Durable Goods Orders (JUN)	-0.3%	0.0%
12:30	USD	Durables Ex Transportation (JUN)	-0.2%	-0.9%
14:00	USD	U. of Michigan Confidence (JUL F)	56.3	56.6
14:00	USD	New Home Sales (MoM) (JUN)	-1.8%	-2.5%
14:00	USD	New Home Sales (JUN)	503K	512K

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Asia Stocks Fall for Fifth Week in Six on Global Growth Concern

By Hanny Wan and Chua Kong Ho

July 19 (Bloomberg) -- Asian stocks declined for the fifth week in six, driving the benchmark index to the lowest level since October 2006, on concern the weakening global economy will erode profits.

Cnooc Ltd., China's largest offshore oil producer, tumbled after crude headed for its worst week in three years. Wipro Ltd., India's third-largest software-services provider, slumped after saying customers cut spending. Mitsubishi UFJ Financial Group Inc. fell in Tokyo and Cathay Financial Holding Co. dropped in Taipei after they disclosed holdings of debt at embattled U.S. mortgage lenders Fannie Mae and Freddie Mac.

``Growth is slowing and not just in the U.S.,'' said Daphne Roth, Singapore-based vice president of equity research at ABN Amro Private Bank, which oversees about $20 billion in Asian assets. ``A lot of money has been put into the commodities space and with the underlying demand slowing, it makes sense to exit.''

The MSCI Asia-Pacific Index lost 3.3 percent to 129.16 as all 10 of its industry groups declined. The benchmark gauge has retreated 18 percent this year as more than $435 billion in credit-related losses prolong the global economy's slump and rising commodity prices stoke inflation.

Japan's Nikkei 225 Stock Average declined 1.8 percent to 12,803.70, falling for a sixth week. South Korea's Kospi index lost 3.7 percent in its seventh weekly decline. That's the longest losing streak since June 1996. Fifteen days of declines on Pakistan's Karachi Stock Exchange 100 Index led to hundreds of investors stoning the building on July 17 and shouting anti- government slogans.

Oil Producers

Cnooc plunged 9.6 percent to HK$11.88 this week. Inpex Holdings Inc., Japan's biggest oil explorer, slumped 8.9 percent to 1.13 million yen.

Crude oil futures dropped 11.2 percent to $128.88 a barrel in New York in the biggest weekly decline since December 2004, after Federal Reserve Chairman Ben S. Bernanke said risks to growth and inflation have risen in the U.S. and a report showed China's economy grew at the slowest pace since 2005 last quarter.

BHP Billiton Ltd., the world's largest mining company, dropped 9.2 percent to A$36.65 this week. Rio Tinto Group, the third largest, retreated 8.3 percent to A$115.50.

Strategists at Merrill Lynch & Co. and Morgan Stanley said investors should sell commodities stocks because a slowing global economy will cut demand for raw materials such as copper, nickel and corn.

Wipro, Satyam

Wipro tumbled 12 percent to 363 rupees. The company predicted demand in the fiscal first half would remain weak as some telecom customers cut spending. Wipro manages computer networks, offers engineering services and operates call centers for clients including Cisco Systems Inc. and Boeing Co.

Satyam Computer Services Ltd., India's fourth-largest computer-services provider, slumped 14 percent to 383 rupees, after leaving its forecast unchanged for the 12 months to March 31, 2009.

The two companies join Infosys Technologies Ltd. in signaling an uncertain sales outlook for the fiscal year as banks and financial-services companies cope with the collapse of the U.S. subprime mortgage market.

Mitsubishi UFJ, Japan's largest bank by market value, lost 4.1 percent to 951 yen. Sumitomo Mitsui Financial Group Inc. fell 1.4 percent to 824,000 yen.

Agency Debt

Mitsubishi UFJ held 3.3 trillion yen ($31 billion) in bonds issued by U.S. government-backed companies including Fannie Mae and Freddie Mac as of March 31, the company said July 15. Sumitomo Mitsui said it owned 219.8 billion yen in such bonds.

Cathay Financial, Taiwan's biggest publicly traded financial services firm, declined 9.1 percent to NT$60. The Taipei-based company revealed July 15 it has NT$200 billion ($6.6 billion) in debt linked to the U.S. mortgage lenders.

The U.S. Treasury and Federal Reserve were forced to assemble a rescue plan for Fannie and Freddie on July 13 to stem a collapse of confidence in the two companies, which own or guarantee about half of the $12 trillion in U.S. home loans during the country's worst housing recession in 25 years.

``The stocks were beaten down in the week due to worries about the stability of the large U.S. government-sponsored mortgage companies,'' said Brett Hemsley, an analyst at HSBC Holdings Plc in Tokyo.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net



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Stern Says Fed Shouldn't Wait for End of Crisis to Raise Rates

By Vivien Lou Chen

July 19 (Bloomberg) -- The Federal Reserve shouldn't wait for housing and financial markets to stabilize before it begins raising interest rates, central bank policy maker Gary Stern said.

``We're pretty well-positioned for the downside risks we might encounter from here,'' Stern, president of the Federal Reserve Bank of Minneapolis, said in an interview yesterday. ``I worry a little bit more about the prospects for inflation.''

The comments by Stern, a voter on the rate-setting Federal Open Market Committee this year, reinforced traders' forecasts for a rate increase by year-end. Stern indicated that Treasury Secretary Henry Paulson's rescue plan for Fannie Mae and Freddie Mac will help prevent a deeper housing and economic slump.

``We can't wait until we clearly observe the financial markets at normal, the economy growing robustly, and so on and so forth, before we reverse course,'' said Stern, 63, the Fed's longest-serving policy maker. ``Our actions will affect the economy in the future, not at the moment.''

The bank president compared the credit crunch to the one in the early 1990s, which restrained economic growth for almost three years. That's a more sanguine assessment than others have. The International Monetary Fund has said it's the worst financial shock since the Great Depression. Former Fed Chairman Alan Greenspan said it's the most intense in more than half a century.

Rate Outlook

Traders' estimates of a rate increase in October rose to 64 percent yesterday after Stern's remarks were published, from 58 percent earlier in the day.

Stern dissented three times in favor of raising rates in 1996. He is the only FOMC member who's served with three chairmen: Paul Volcker, Greenspan and Ben S. Bernanke. He became the Minneapolis Fed president in 1985.

His comments yesterday underscore that ``the Fed has grown more uncomfortable with the inflation situation,'' Tony Crescenzi, chief bond strategist at Miller Tabak & Co. in New York, wrote in a note to clients.

Stern spoke two days after government figures showed consumer prices surged 5 percent over the past year, the biggest jump since 1991. Excluding food and fuel, so-called core prices rose 2.4 percent, higher than the 2.1 percent average over the last five years.

`Too High'

``Headline inflation is clearly too high,'' Stern said. He added that he's concerned that will feed through to core prices and public expectations for inflation.

As long as energy and food costs level off, core inflation ought to slow over the next year, Stern said.

Crude oil has surged 73 percent in the past 12 months, and rose to a record of $147.27 a barrel on July 11. Worldwide, prices for food commodities such as wheat and rice were 43 percent higher in April than a year earlier, according to the United Nations Food and Agriculture Organization.

Stern declined to say when policy makers may shift toward raising rates.

``We're going to want to, in my opinion, reverse some of those interest-rate reductions,'' he said. ``I don't think there's any question about that. But exactly when depends on how things evolve from here.''

The FOMC halted its series of seven reductions last month, after reducing the benchmark rate to 2 percent, from 5.25 percent last September.

Traders anticipate the Fed will boost its main rate at least a quarter point from 2 percent in October, after keeping borrowing costs unchanged in August and September. There's a 79 percent probability of a move by year-end, futures prices show.

Bernanke's View

Minutes of the Fed's June 24-25 gathering, released July 15, showed that some Fed officials favored an increase in rates ``very soon.'' Bernanke this week said there are risks to both inflation and growth, abandoning the FOMC's June assessment that the threat of a ``substantial'' downturn had receded.

``This is a very challenging policy environment,'' Stern said yesterday. ``I don't think we ought to pretend that'' an end to the credit crisis ``won't take some time,'' he said.

The Fed on July 13 offered Fannie Mae and Freddie Mac access to direct loans from the central bank in case the firms needed the financing before Congress acts on Paulson's rescue plan. The Treasury chief is seeking power to make unlimited loans to and purchase equity in the companies if needed.

Stern said the Treasury proposals are ``clearly designed to bolster Fannie and Freddie, and to address'' risks the firms' troubles pose to the credit crisis and housing slump.

To contact the reporter on this story: Vivien Lou Chen in Minneapolis at vchen1@bloomberg.net



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Friday's News Recap: Canadian Wholesale Trade Up, Consumer Spending Still Strong

News Recap | Written by CEP News | Jul 18 08 20:39 GMT |
(CEP News) - It was a quiet day for releases in North America, with wholesale trade and leading indicators released in Canada. In the U.S, markets received state and regional employment data and heard some comments about inflation from Minneapolis Fed president Gary Stern.

Canada's wholesale sales posted a larger-than-expected 1.6% rise in May, driven predominantly by rising fertilizer sales, Statistics Canada reported Friday. Wholesale sales hit $44.2 billion in the month, up from $43.5 billion in April. This marks the fourth gain in the last five months. Analysts had expected to see a 0.5% increase in the monthly figure. Fertilizer exports soared 57.7% compared with the same month last year.

"Since the volume of wholesale trade was only robust in May (in real terms) this report will likely have a sizable impact on May GDP," noted Charmaine Buskas, senior economics strategist from TD Securities. "The next piece of the puzzle is the retail sales numbers which come out next week, but there is already good momentum for May GDP."

Canada's composite leading index was unchanged in June as consumer spending remained strong but housing and manufacturing showed signs of weakness, Statistics Canada reported Friday. The flat reading in the index followed gains of 0.2% in May and 0.1% in April. Analysts had expected to see the composite index rise by another 0.1% in June. New orders from manufacturers plunged 3.5% to $25.4 billion in June from $26.3 billion the month prior.

In the U.S., regional and state unemployment rates were generally little changed in June, as 24 states recorded month-to-month unemployment rate increases, 16 states and the District of Columbia registered decreases and 10 states had no change, according to data released by the Bureau of Labor Statistics.

On a year-to-year basis, the unemployment rate was up in 45 states (and D.C.), down in four states and unchanged in one state. The national unemployment rate was unchanged in June at 5.5%, but was up from 4.6% a year earlier.

Speaking in an interview with Bloomberg on Friday, Minneapolis Federal Reserve President Gary Stern (voter) said that the Federal Reserve can't wait for the end of the crisis to raise rates. "I worry about the prospects for inflation. The headline inflation rate is clearly too high," said Stern. He also noted that the Fed is well-positioned for a downside risk to growth. He commented that the current credit crisis was reminiscent of the early 1990s.

In overnight news, Germany's Federal Statistics Office (Destatis), reported that German producer price inflation accelerated to 6.7% year-over-year in June, up from both the 6.5% growth rate expected and the 6.0% rate recorded in May. June's annualized increase is the largest recorded since March 1982. In monthly terms, the producer price index rose 0.9%. Economists had expected a more severe slowdown to 0.7% after prices increased 1.0% in the previous month.

Eurostat reported that the euro zone trade balance fell to a deficit of €4.6 billion in May. Economists had expected a smaller deficit reading of €1.0 billion following the previous month's €2.5 billion surplus. April's figure was revised up from a surplus of €2.3 billion. Adjusting for calendar effects, the trade deficit was only €1.5 billion, down from a surplus of €1.4 billion recorded in April. Economists had expected a surplus reading of €800 million. Meanwhile, April's figure was revised down from a surplus level of €2.2 billion.

The Bank of Japan released the minutes of its June 12 and 13 monetary policy meeting, where it was unanimously agreed that the current money market operation guidelines would be maintained and that the uncollateralized overnight call rate would remain unchanged at 0.50%.

In a joint interview with the Irish Times, France's Le Figaro, Germany's Frankfurter Allgemeine Zeitung and Portugal's Jornal de Negocios published on Friday, European Central Bank President Jean-Claude Trichet reiterated that the mandate of the ECB was to ensure price stability in the medium term and suggested that would be achieved "in line with our definition" over 18 months.

"We are not pursuing two goals; we are pursuing one goal, which is price stability in the medium term," Trichet said.

Speaking to the Irish Times, Trichet said that policy-makers would not modify monetary policy to help individual euro zone states that are seeing notable economic slowdowns, such as Ireland, Spain or Portugal, and emphasized that the interest of the entire monetary zone was the focus of the ECB. "Our monetary policy must be optimal at the level of the whole euro area," Trichet said.

Speaking at the London Stock Exchange on Friday, Bank of England Deputy Governor John Gieve said he expects inflation to rise to "well over" 4% in 2008 while economic growth should slow sharply. "We are expecting inflation to be well over 4 percent for much of the rest of the year," Gieve said in a prepared statement, adding that "timely sources of data suggest the economy is already slowing fast."

By Stephen Huebl, shuebl@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , with contributions from Todd Wailoo, twailoo@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , Geoff Matthews, gmatthews@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , Patrick McGee, pmcgee@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, cmarkham@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.
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Closing Market Recap: Fixed Income Tumbles After Financials Rebound

Market Updates | Written by CEP News | Jul 18 08 21:40 GMT |
(CEP News) - Renewed confidence in the U.S. economy and financial sector sparked a modest rally in U.S. stocks and a Treasury selloff on Friday. Meanwhile, Canadian equities closed the week on a positive note and the loonie flirted with parity.

For the most part, markets were relatively unchanged on Friday after a tumultuous week. The exception was in fixed income where prices fell and yields shot higher.

U.S. two-year yields were up 14.7 bps to 2.63%, with five-year yields up 14.1 bps to 3.41%, 10-year yields up 9.2 bps to 4.08% and 30-year yields up 4.0 bps to 4.65%. The Eurodollar September 08 contract was down 4.0 ticks to 97.08. The yield curve was flatter, with the 10/2-year spread down 5.9 bps to 144.49 bps.

William O'Donnell, fixed income strategist at UBS, said better-than-expected earnings from Citigroup and momentum selling were hurting the bond market.

"One of the problems we have is that technical conditions are pretty poor," O'Donnell said. "We had a rally since the middle of June and we're seeing a bit of a giveback after a bounce in some of the financials."

Citigroup reported a second-quarter net loss of $2.5 billion, or 54 cents a share. But analysts had expected a loss of about $3.7 billion.

Shares of Citigroup closed 7.4% higher while the ETF that tracks the U.S. financial sector was up 1.6%. Further support came from the embattled shares of U.S. mortgage guarantors Fannie Mae and Freddie Mac, which gained 22.6% and 10.5% respectively.

The rally in financials offset a technology selloff, pushing stocks into positive territory. Toronto's S&P/TSX composite index closed up 56 points to 13,516, the Dow Jones industrial average up 50 points to 11,497, the S&P 500 unchanged at 1,261 and the Nasdaq down 30 points to 2,283.

European stock markets closed in positive territory with the Eurostoxx up 49 points to 2,836, the UK FTSE 100 up 90 points to 5,376 and the German DAX up 111 points to 6,383.

Crude oil prices were relatively stable on Friday but on the week were down $18 at $128.88 per barrel.

Commodity trader Dennis Gartman pointed to changes in consumer and corporate habits as the reasons for the commodity decline. He said prices could fall to $100 "rather easily."

"What has taken place to send crude so violently lower over the course of the past week: demand destruction plainly and simply," Gartman wrote in his newsletter.

On Friday, WTI crude oil was down $0.41 to $128.88.

The fall in energy prices had little effect on the Canadian dollar. It outperformed every G10 currency except the Australian dollar and pound sterling in the past week.

"The fact that CAD outperformed as crude oil headed to its largest one-week decline in three-and-a-half years would appear to underscore that this correlation remains broken for now," wrote Scotia Capital currency strategists Steve Malyon and Sacha Tihanyi in a note to clients.

On Friday, the Canadian dollar was unchanged 0.9943 against the U.S. dollar (1.0058 USD/CAD) and up 0.70 to 106.35 against the yen.

The U.S. dollar was up 0.69 to 106.96 against the yen and the Dollar Index was down 0.069 to 72.173.

The euro was down 0.0016 to 1.5848 against the U.S. dollar, down 0.0016 to 1.5938 against the Canadian dollar, up 0.0012 to 0.7928 against the pound sterling and was higher by 0.92 to 169.48 against the yen.

The pound sterling was down 0.0050 to 1.9990 against the U.S. dollar and down 0.0052 to 2.0104 against the Canadian dollar.

Elsewhere in fixed income, yields on two-year Canadian government bonds were up 7.0 bps to 3.19%, with five-year yields up 4.5 bps to 3.41%, 10-year yields up 2.8 bps to 3.81% and 30-year yields up 0.6 bps to 4.15%. The Canadian 10-year note was yielding 27.78 bps less than the U.S. 10-year note.

In Germany, returns on two-year German bonds were up 16.0 bps to 4.54%, with five-year yields up 15.8 bps to 4.60%, 10-year yields up 12.8 bps to 4.57% and 30-year yields up 9.6 bps to 4.86%.

Yields on UK two-year bonds were up 13.9 bps to 5.11%, with five-year yields up 14.4 bps to 5.06%, 10-year yields up 14.0 bps to 5.04% and 30-year yields up 9.8 bps to 4.68%.

Looking to the week ahead, the health of the Canadian consumer and rising inflation will be in focus.

On Tuesday, Statistics Canada will release the May retail sales report. Economists believe the domestic economy continues to chug along and spending will rise 0.5% from April.

On Wednesday, inflation will be the focus with the June report on the Consumer Price Index. Over the past year, inflation has become a global problem that Canada has dodged mostly because of the rapid rise of the loonie. Canada has had some of the lowest inflation rates in the world, but that could be changing. In the previous report on CPI, prices rose from 1.7% to 2.2%. Economists expect the trend to continue and the year-over-year CPI to hit 2.9%, marking the highest level since 2005.

Still, Canada remains a relatively low inflation country. Euro zone inflation is at 4.0% while U.S. consumer prices have increased 5% in the past year.

All data taken at 4:58 p.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 Cristina Markham, cmarkham@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.



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