Monday, April 21, 2003
In a holiday-shortened week, investors recycled their focus back to economic fundamentals and, of course, to earnings. While some market players were quick to dismiss March data as "pre-war", they do impact some first-quarter results. The foreign exchange market punished the dollar - again - as thoughts of a post-war dollar rally faded and unease about U.S. growth prospects resurfaced. On the week, only the Hong Kong and Singapore declined - 0.8 percent and 1.4 percent, respectively. Index increases ranged from 0.3 percent (Australian All Ordinaries) to 7.2 percent (South Korean Kospi). The number of indexes above their year-end level has grown to three - U.S. NASDAQ, Mexican Bolsa and Frankfurt DAX. The U.S. Dow is about even on the year.
Bank of Canada marches to own drummer
The Bank of Canada increased its key policy interest rate on Tuesday by 25 basis points to 3.25 percent. The Bank cited inflation concerns and expectations of a vigorous domestic economy this year and in 2004. While the Bank said that the near-term outlook for the global and Canadian economies was somewhat weaker, it believes growth may accelerate later this year. In five small stages spanning a year, the Bank has raised its overnight rate by a total of 1.25 percent. With each announcement it has warned of inflationary concerns and the threat that the Canadian economy may be at or near its non-inflationary capacity. Canada has the most vigorous economy of the Group of Seven (United States, Britain, France, Germany, Italy and Japan).
Equities recoup losses
