North American markets are powering forward this morning after US employment data was better than expected, sending the TSX index to its highest level since early January. A close this afternoon at the indexes current level would be a new high for this bull market. Payrolls in the US declined by 36,000 in February, roughly half of average estimates, while the unemployment figure remained unchanged at 9.7%. Analysts had expected that major storms last month would have more of a negative effect on employment. Canada’s finance minister yesterday tabled his budget with no new fiscal stimulus measures and a five year plan to balance the budget. The plan is aggressive but credible, and would make Canada the first of the G-7 countries to eliminate its deficit. The TSX is up 131 pts. The Dow is up 84 pts.
The Canadian dollar was unchanged after the budget release, but is rising on the back of the employment data this morning. The Loonie is up a quarter-cent to US$.9729. Bond yields continue to climb this morning with the 5-year Canada yield up to 2.77% and the 10-year to 3.47%. The 5-year yield is now at its high for the year, which may well put some upward pressure on mortgage rates. Gold is up $4.40 to US$1138/oz. Oil is up $1.36 to US$81.57/barrel.
