Financial Update: February 23, 2011

The “overexuberance” in consumer spending that lifted Canada out of the recession at the end of 2009 and early in 2010 is well behind us

• TSX -159.53 to 13,963.68 as jitters over the escalation of violence in the oil-rich Middle East sent crude prices soaring and stocks falling.

• DOW -178.46 to 12,212.79 mixed U.S. economic data showed home prices in a majority of major U.S. cities have fallen to their lowest levels since the housing bubble burst, but consumer confidence rose in February to its highest point in three years.

• Dollar -.73c to 100.92c USD strength in gold and oil, which helped prop up the Canadian dollar for much of the day, could not stop an afternoon retreat to the U.S. currency after Libyan leader Moammar Gadhafi urged his supporters to attack protesters who are violently challenging his 42-year rule.

• Oil +$5.71 to $95.42 USD per barrel.

• Gold +$12.50 to $1401.10 per ounce.

• Canadian 5 yr bond yields markets were down .11bps to 2.63. The spread (based on the MERIX 5 yr rate published rate of 4.14%) is high in the comfort zone at 1.51.

(courtesy of Barb Morgan, DBD Ontario Southwest)