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Canadian dollar climbs with oil prices, bonds fall
Reuters: [2008-05-06 23:33:00]
By John McCrank
TORONTO, May 6 (Reuters) - The commodity-linked Canadian
dollar climbed nearly 1 percent against the U.S. dollar on
Tuesday, boosted by record high oil prices.
Canadian bond prices fell as investors shifted assets into
equities, which were led higher by energy stocks.
The Canadian dollar closed at C$1.0029 to the U.S. dollar,
or 99.71 U.S. cents, up from C$1.0135 to the U.S. dollar, or
98.67 U.S. cents, at Monday's close.
The currency briefly rose above parity with the greenback
for the first time in two weeks, hitting US$1.0001, making a
greenback worth 99.99 Canadian cents.
Driving the increase was a surge in the price of oil <CLc1>
to a record $122.73 on supply worries ahead of the U.S. summer
driving season. See [ID:nSIN170894]
Canada is a major producer of oil and its currency is often
influenced by moves in its price.
"Canada is outperforming all the majors (currencies)," said
Camilla Sutton, currency strategist at Scotia Capital.
"The commodity currencies are generally doing well today,
but I would suspect there is probably a flow in there too, just
because we are outperforming to such an extent."
Sutton said such a flow could have been related to hedging
or mergers and acquisitions.
Canadian economic data during the day was mixed, with
building permits falling 4.5 percent in March from February,
compared with market expectations for a 1.4 percent gain.
The currency dropped on the news, but quickly rebounded as
the data also showed an upward revision of February building
permits to a gain of 0.8 percent, compared with the 1-percent
drop previously reported.
Other data showed that Canadian purchasing activity rose in
at a slower pace in April than in March, but it was above
market expectations and helped the Canadian dollar rally.
The Ivey Purchasing Managers Index fell to 57.6 in April
from 59.0 in March. The market was expecting a reading of
54.5.
Upcoming data include April housing starts on Thursday and
March international merchandise trade data on Friday. Also set
for Friday is the April employment report, which Sutton said
will be the main event as far as the Canadian dollar is
concerned.
BONDS FALL
Canadian bond prices fell across the curve as a rally in
the stock market, led by energy stocks, took away the safe
haven appeal of government debt.
"Canada is certainly benefiting from the runup in commodity
prices," said Mark Chandler, fixed income strategist at RBC
Capital Markets. "It's been the story for a while, but it's
certainly increasing in magnitude, so that's obviously, in the
grander scheme of things, better for Canada's economy than in
the U.S."
The two-year bond fell 7 Canadian cents to C$101.87 to
yield 2.814 percent. The 10-year bond slid 47 Canadian cents to
C$102.38 to yield 3.687 percent.
The yield spread between the two- and 10-year bonds was
87.3 basis points, up from 84.2 at the previous close.
The 30-year bond shed C$1.16 to C$113.79 to yield 4.176
percent. In the United States, the 30-year treasury yielded
4.668 percent.
The three-month when-issued T-bill yielded 2.59 percent,
down from 2.64 percent at the previous close.
(Editing by Peter Galloway)
((john.mccrank@thomsonreuters.com; +1 416 941 8083; Reuters
Messaging: john.mccrank.reuters.com@reuters.net))
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Keywords: MARKETS CANADA DOLLAR BONDS
POLL-Peru central bank seen keeping rates stable
Reuters: [2008-05-06 23:19:00]
* What: Peru's central bank interest rate decision
* When: Around 6 p.m. (2300 GMT) Thursday, May 8
* Most economists reckon rate will remain unchanged
By Ricardo Serra
LIMA, May 6 (Reuters) - Peru's central bank will likely hold its benchmark interest rate steady at 5.5 percent on Thursday after its monthly monetary policy meeting, according to a Reuters poll.
One of 10 economists surveyed saw a rate rise to 5.75 percent, but all the others expect rates to remain unchanged. after inflation for April slowed to 0.15 percent from 1.04 the previous month.
In April, the bank raised its benchmark rate by a quarter percentage point and hiked reserve requirements for banks, the latest in a series of efforts to curb inflation.
The central bank's inflation target for this year is 2 percent, plus or minus a one percentage point tolerance band.
Most economists expect prices to rise about 4 percent this year, mainly on an uptick in international food prices, and as the economy grows around 9 percent a year.
(Writing by Terry Wade; Editing by Diane Craft)
((terry.wade@thomsonreuters.com; +511 421 1733)) Keywords: PERU ECONOMY/RATES
UPDATE 4-High-flying crude gives boost to Toronto stocks
Reuters: [2008-05-06 23:10:00]
(Adds details, quotes)
By Leah Schnurr
TORONTO, May 6 (Reuters) - Oil and gas companies led the way higher for the Toronto Stock Exchange on Tuesday, helping the main index climb nearly 1 percent as crude oil prices notched another record high.
Suncor Energy <SU.TO> was among the biggest gainers, up C$4.62, or 4 percent, at C$121.12 as the price of oil flew up over $122 a barrel on a weaker U.S. dollar and concerns over supply.
The Toronto market's heavily weighted energy sector jumped 3.3 percent. Canadian Natural Resources <CNQ.TO> was up C$4.05, or 4.6 percent, at C$92.00, and Canadian Oil Sands Trust <COS_u.TO> added C$3.68, or 8.3 percent, to C$48.18.
Crude settled up $1.87 at $121.84 a barrel, easing back from a record $122.73 reached earlier in the day. However, Goldman Sachs forecast oil could hit $200 a barrel within the next two years.
"How high can it go? Who knows," said Andrew Martyn, portfolio manager at Davis-Rea.
The S&P/TSX composite index <.GSPTSE> closed up 139.96 points, or 0.98 percent, at 14,414.30 with half its 10 main sectors higher.
The materials sector, home to resource issues, rallied 1.2 percent, while the base metals mining subindex gained 2.4 percent, pulled up by oil's momentum. Teck Cominco <TCKb.TO> rose C$1.48, or 3.2 percent, to C$48.18.
"The mining sector, the gold sector also got boosted, meaning that the whole commodities game seems to be back for who knows how long," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
"We keep saying it's a fad, but (the oil price) comes down and starts to move back up," said Nakamoto, noting that ultimately it's underlying supply and demand that will make a price level sustainable.
Methanex <MX.TO> shares jumped C$3.02, or 12.4 percent, to C$27.40 after the methanol supplier upped its quarterly dividend by 11 percent and said it will buy back up to 10 percent of its common stock.
Fertilizer company Potash Corp of Saskatchewan <POT.TO> was up C$3.03, or 1.5 percent, at C$199.39, and competitor Agrium <AGU.TO> rose C$2.52, or 3 percent, to C$86.75.
Sun Life Financial <SLF.TO> weighed on the index after the insurer warned of a difficult year ahead as it reported that credit market troubles and a strong Canadian dollar stung its operating earnings.
Sun Life finished down C$1.76, or 3.6 percent, at C$47.44, while the financial sector overall gave up 0.5 percent.
Also on the downside, BlackBerry maker Research In Motion <RIM.TO> slid C$2.37, or 1.8 percent, to C$132.25.
Market volume was 393 million shares worth C$7.6 billion. Advancers outpaced decliners 890 to 693. The blue chip S&P/TSX 60 index <.TSE60> closed up 8.71 points, or 1.03 percent, at 855.12.
On Wall Street, stocks rallied after U.S. home finance company Fannie Mae <FNM.N> sought to reassure investors over the outlook for the credit and housing markets.
The Dow Jones industrial average <.DJI> rose 51.29 points, or 0.4 percent, to 13,020.83, while the Nasdaq composite index <.IXIC> was up 19.19 points, or 0.78 percent, at 2,483.31. ($1=$1.00 Canadian) (Editing by Rob Wilson) ((leah.schnurr@thomsonreuters.com; +1 416 941 8056; Reuters Messaging: leah.schnurr.reuters.net@reuters.com))
Keywords: MARKETS CANADA STOCKS
Keywords: MARKETS CANADA STOCKS
Chile stocks slip on weak growth data, oil; peso firms
Reuters: [2008-05-06 23:08:00]
(Adds quote, details, closing stock figures)
SANTIAGO, May 6 (Reuters) - Chilean stocks closed lower for a second day on Tuesday, after oil prices hit record highs and following weak local growth data.
Chile's peso gained as the dollar retreated from a two-month high.
On the stock exchange, the all-market IGPA index <.IGPA> retreated 0.60 percent to 13,883.35 points, while the blue-chip IPSA index <.IPSA> fell 0.73 percent to 2,957.49 points.
"Domestic growth data was weak and foreign investors have been getting rid of retail," said Marcelo Ogaz. "And with oil at historic highs airlines worldwide are falling."
March economic growth reported on Monday fell to 0.7 percent year on year, well below expectations, while oil prices touched new all-time highs on Tuesday.
Transport company losses included LAN Airlines <LAN.SN> down 2.35 percent, and shipper Vapores <VAP.SN> closing 2.5 percent lower.
Drinks bottler Andina <AND_pb.SN>, down 2.54 percent, and department store chain Ripley <RIP.SN> falling 1.65 percent led declines among consumer stocks.
Paper and wood pulp producer CMPC <CAR.SN> saw its shares retreat 2.04 percent.
Of Chile's 40 blue-chip stocks, 30 ended lower.
The Chilean peso <CHILJ> <CLP=CL> closed 0.43 percent higher at 466.50/467.00 per dollar compared with Monday's close at 468.50/469.00.
"The peso's rise is a correction due to profit-taking after the dollar's recent gains," a broker said. "The market seems confused about what the dollar's equilibrium price should be, which makes the exchange rate volatile."
Chile's central bank bought $50 million worth of dollars on Tuesday, a continuation of the daily purchases begun on April 14 as part of an $8 billion currency intervention program.
The peso, which had appreciated by about 15 percent against the dollar since the beginning of the year, has seen its gain fall to about 6.7 percent. (Reporting by Lisa Yulkowski and Froilan Romero; Editing by Diane Craft) ((lisa.yulkowski@reuters.com; +56-2-370-4250)) Keywords: MARKETS CHILE/
Argentine stocks rise on oil prices; bonds fall
Reuters: [2008-05-06 23:06:00]
BUENOS AIRES, May 6 (Reuters) - Argentine stocks rose on Tuesday as record crude oil prices lifted energy-related shares, while the peso and bonds finished weaker.
The MerVal index <.MERV> of leading stocks ended up 1.02 percent at 2,127.09 points. Volume on the broad market was a healthy $49.7 million and of active issues, 76 advanced, 22 declined and 17 were unchanged.
U.S. crude oil futures ended above $121 a barrel amid supply concerns and a report by investment bank Goldman Sachs predicting oil could rise to $150 to $200 a barrel.
"The record price helped Petrobras and Tenaris," said Marcelo Paccione, an analyst at ConsultCapital.
The MerVal also got a boost from stronger-than-expected first-quarter earnings from steelmaker Siderar <SID.BA>, he said.
On Monday, Siderar reported its net profit in the first three months of the year rose by 87.5 percent to 566.1 million pesos due in part to higher sales. Siderar shares closed 0.75 percent higher at 26.1 pesos.
Shares in index heavyweight and steelmaker Tenaris <TENA.BA> -- the world's leading producer of seamless steel tubes for the energy industry -- rose 0.77 percent to 88.7 pesos due to optimism about its first-quarter earnings, due later on Tuesday.
The local listing of Brazilian state-run energy Petrobras <APBR.BA> gained 2.8 percent to close at 104.5 pesos.
Argentina's locally traded bonds <AR/BONOS> slipped 0.7 percent on average on Tuesday in light trade marked by investor caution over the outcome of a meeting between farmers and the governemnt aimed at averting a repeat of March's farm strike.
Peso-denominated debt was the hardest hit on Tuesday, with the Par bond plunging 2.9 percent in over-the-counter trade.
Tension over the farm talks also triggered dollar purchases, sending the peso lower.
In formal interbank trade, the peso fell 0.08 percent to 3.1750/3.1775 per dollar <ARS=RASL>. In informal trade between foreign exchange houses, as measured by Reuters, it weakened by 0.24 percent to 3.23/3.2325 per dollar <ARSB=.
About 40 percent of currency trade takes place informally between foreign exchange houses. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Helen Popper; Editing by Leslie Adler) ((helen.popper@thomsonreuters.com; +54-11-4318-0655; Reuters Messaging: helen.popper.reuters.com@reuters.net)) Keywords: MARKETS ARGENTINA/
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