So what's up this morning? Well the whole banking sector is doing OK today -- Societe Generale's share price are up 5% today, the US futures are also up...the USD is in free fall after last night's Senate vote to punish China for an undervalued currency, and Obama's job bill failed in the Senate -- so every analyst will now revise growth estimates for Q4 and Q1/2012. I would say that the GOP/Republicans strategy is really paying off! Make sure that the economy is in free fall before November 2012 -- then they can fix it (again huge amount of sarcasm here).
The S&P500 is fooling around 1,200 it may have another 50 pts to go (target range 1250) but after that down has to be the trend. The CAD is tracing back toward parity and will maintain this trend as long as oil price continue to rise. This morning WTI is around $86/bbl and the CAD is just shy of 1.5c of parity (10 days ago it was 5c lower).
Since last nights votes were 100% politics and 0% policy observers of Congress are now assuming that the US legislative branch is shut down until February 2013 (hard to believe). For the next 15 months nothing of any use will emerge from Congress, so for Canada the rule has to be any dealing with the US will have to avoid the legislative branch -- interesting times ahead.
As a Canadian watching the Republican nomination process is somewhat depressing, it would seem that Perry is out of the race its between Romney and Cain (Pizza guy, and ex-chairman of the Kansas City Feds) both have pledged no new taxes -- ever, and Cain has promised a balance budget within 12 months of being in office -- considering that the U.S. government currently borrows 40% of all expenses -- should Cain win the nomination (unlikely but not impossible) then America will face the mother of all recession -- cannot be good for Canada.
No real economic news out of Canada this week (we got construction yesterday [up] at odds with new permits last week [down]).