Heads up and a rebukeThis (below) tells you everything you need to know about world conditions. I've written enough posts about the regional happenings so as to produce a solid picture. I've said Elmer needs to drag this out and today is part of the reason. We all knew May was coming and June is a rally. The day to day is a little harder to predict. It gets even harder when you have the type of manipulations going on that we experience. Today was a perfect example. I could predict tomorrow but if asked for my reasons I would not be inclined to give them. Some of you think I'm joking and the data I've provided is BS and you make negative statements. I don't know if it's because you're watching your spread dissapear or if you're just programmed to act that way. You seem extra touchy when it comes to politics. If everyone who reads this emailed Christie and said they are voting Green because of what the gang has done and would spread the sentiment to everyone they could influence we would see immediate results and have the NTL tomorrow. But that's not going to happen is it. So you like having your heads stuck up your backsides. It's ok to build your castles in the sky just don't try living in them. For that matter, I wouldn't suggest investing in them either. You deserve this rebuke.
We will rise again but only after the main markets adjust and steady the course. For this reason it makes a great deal of sense for Elmer to cause whatever delays he can. To feed the moral he can give us the fly over data. It's speculation but positive and that's good enough. Then the AGM. By the Way, I emailed him with my usual pointed questions a few days ago and did not get a response. They are the kind of questions that require consideration. The fact that it's taking longer than I expected is telling.
Please note the contradictory statements in the data. Major manipulations amplifying the traditional cycles. This is the world of investing catching up to the Balckberry world. It's not done yet.
* C$ falls to C
.9611 to the U.S. dollar, or $1.040
* Tumbling oil, equities weigh on currency
* Canada trade surplus grows, U.S. trade deficit rises
* Bond prices reverse early losses, rally across curve
* 2-year auction averages 1.873 percent (Updates to afternoon, recasts, adds bond auction results)
By Claire Sibonney
TORONTO, May 11 (Reuters) - Canada's dollar reversed earlygains against the U.S. dollar on Wednesday, tracking equitiesand commodity prices lower, while a two-year government bondauction met with solid demand.
By midday, oil prices had tumbled 4 percent with U.S. crudefutures back below $100 a barrel after inventories showed crudestocks rose more than expected last week and soft Chineseinflation data suggested the world's second largest economymight be cooling. [O/R]
Stock markets on both sides of the border were also downsharply as oil and gas shares fell. [.TO] [.N]
"You're dealing with a potential risk-off tone right now,unfortunately, and the Canadian dollar gets caught in thecrossfire as do commodities and equities as well," said DavidTulk, chief Canada macro strategist at TD Securities.
Earlier, the currency had rallied on the back of risingoverseas markets, better-than-expected Canadian trade data andtalk of positive flows on the back of foreign acquisitions ofCanadian companies and interest from Asian central banks.
"We're one step forward, two steps back," Tulk said.
Canada's trade surplus bounced higher in March after twomonths of declines as broad increases in exports outstrippedhigher imports. [ID:nN11188678] In contrast, the U.S. tradedeficit rose more than expected. [ID:nCAT005430]
At 1:11 p.m. (1711 GMT), the Canadian dollar CAD=D4 wasat C
.9611 to the U.S. dollar, or $1.040, down from Tuesday'sNorth American session close of C
.9577 to the U.S. dollar, or$1.0442. Earlier, it hit a high of C
.9513 against the U.S.dollar, or $1.0512, its strongest level since May 4.
BOND PRICES RALLY, STRONG TWO-YEAR AUCTION
Canadian government bond prices rallied across the curve,tracking U.S. Treasury prices as the market moved into risk-offmode.
"The Canadian curve is generally moving in sympathy," saidTulk, noting, however, that Canadian bond prices wereunderperforming their U.S. counterparts given thebetter-than-expected domestic trade data.
The two-year Canadian government bond CA2YT=RR climbed 3Canadian cents to yield 1.708 percent, while the 10-year bondCA10YT=RR advanced 19 Canadian cents to yield 3.244 percent.
Canada's sale of two-year government bonds also met withhealthy appetite, helped by persistent worries about globalgrowth, euro zone debt woes and Canada's relatively strongfundamentals. [ID:nTZOBGE70U]
The C$3.5 billion auction produced an average yield of1.873 percent and a bid-to-cover ration of 2.52.
The ratio is a measure of investor demand and a readingabove 2 typically indicates a decent auction. (Editing by Peter Galloway)