Canadian
economics were off the map for currency traders, so the direction of Canadian
markets and securities fell to commodity fluctuations. Fundamentally, commodities account for
nearly 35% of all exports from the Canada.
The term ‘correction’ has been used amongst media outlets and economists
for the current state of affairs in the capital-intensive market. Whether recent declines in energies,
metals and other necessary goods is entrenched in response to fears of a global
economic slowdown or if it is a short-term correction in due to some
profit-taking and the liquidation of positions from investors with frayed nerves
will not be known until the future is behind us. What is known however is that
retracements in some of the contracts from mid-May have been deep are spelling
trouble for Canada’s trade surplus and manufacturing sector. In future markets today crude, natural
gas, gold and copper were on loonie traders’ radars. Energies sank on expectations that a US
report will reveal gasoline supplies will be able to meet American demand come
the summer driving season. Crude
fell to a two-week low after loosing $1.66 to $68.70 per barrel; while the
consistently low level of natural gas, one of Canada’s largest exports, dipped
another $0.014 to $6.210. Amongst
the metals group, copper prices extended its drop by another $17.85 to $315 per
ton, marking a 13% decline over the past four days and the level since
April. Gold prices breached the
psychological $600 per ounce level in a huge $28.80 drop marking the lowest
price for the precious in two months.
Tomorrow economics is back on the table with new motor vehicle sales and
manufacturing shipments, both for April.
Canadian stock indices joined the global slump by declining for the seventh consecutive session. The Canadian benchmark S&P/TSX Index sank 194.71 points, or 1.74%, to 11,002.87 by 16:45 GMT. The chief decliner in the broad market was undoubtedly material producers like Petro-Canada and Inco Ltd. Shares of one of the nations largest oil producers, Petro-Canada, backed off C$0.75 to C$46.25 on concerns that recent revenue strength would erode with commodity values. Number two gold producer Goldcorp saw share value contract C$0.75 to C$46.25 for the same reason, while lower nickel and copper prices caused Inco Ltd. shares to give up C$0.94 to C$64.60.
Canadian bonds proved the antithesis of other securities with values rising with future interest rate hikes becoming less probable in the long-run due to the expected detrimental effects of lower commodities on the Canadian economy. Ten year Canadian government paper was 0.30% higher to 101.40% of face value while yields were off 4 basis points to 4.31.
Canadian stock indices joined the global slump by declining for the seventh consecutive session. The Canadian benchmark S&P/TSX Index sank 194.71 points, or 1.74%, to 11,002.87 by 16:45 GMT. The chief decliner in the broad market was undoubtedly material producers like Petro-Canada and Inco Ltd. Shares of one of the nations largest oil producers, Petro-Canada, backed off C$0.75 to C$46.25 on concerns that recent revenue strength would erode with commodity values. Number two gold producer Goldcorp saw share value contract C$0.75 to C$46.25 for the same reason, while lower nickel and copper prices caused Inco Ltd. shares to give up C$0.94 to C$64.60.
Canadian bonds proved the antithesis of other securities with values rising with future interest rate hikes becoming less probable in the long-run due to the expected detrimental effects of lower commodities on the Canadian economy. Ten year Canadian government paper was 0.30% higher to 101.40% of face value while yields were off 4 basis points to 4.31.
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