Japan’s crisis response likely to drive up U.S. interest rates:
Experts predict the result could be a half- percentage-point increase in U.S. 10-year Treasury yields.
Canadian economic growth will pick up despite crisis in Japan...
New forecast has the Canadian economy advancing a robust 3.5 per cent in the first half of this year, before slowing slightly in the second half
· TSX -22.14 to 13,524.82 reversed a near 1 percent gain in volatile trading, declining for a third straight session as Japan 's nuclear crisis and clashes in the Middle East weighed on investor sentiment, with strong resource prices cushioning the TSX's fall.
· DOW -242.12 to 11,613.30 Equity markets are being rocked as black-swan events** in the Middle East and Japan weigh heavily on sentiment. The drop was also fuelled by weak U.S. housing data as US housing starts plunged to its lowest level in a year
· Dollar -.80c to 100.83c USD the loonie is trapped in a global rush to the exits from risky assets sparked by the nuclear crisis in Japan
· Oil +-$.80 to $97.98USD per barrel
· Gold +$3.30 to $1396.00 per ounce
· Canadian 5 yr bond yields markets -.10bps to 2.44. The spread (based on the MERIX 5 yr rate published rate of 4.04%) is above the comfort zone at 1.60 as bonds soar in a flight to safety
**One more animal to add to our financial zoo. We have the bull, the bear, the dove, the hawk and now the black swan. Characterized by philosopher Nassim Nicholas Taleb, the black swan theory refers to events that are undirected and not predicted. Based on Mr. Taleb’s criteria, the event is a surprise, has a major impact on society, and is rationalized by hindsight. Past examples include 9/11 and the sub-prime mortgage crisis that tipped off the recent recession.
While not everyone one will agree, many market observers, including noted bear Nouriel Roubini, are describing Japan’s nuclear emergency and political turmoil in North Africa and the Middle East as “black swans” that are adding significant headwinds to financial markets.
(courtesy of Barb Morgan, DBD Ontario Southwest)
