Financial Update

TSX +111.15 kicking off the week by surging higher, buoyed by firm oil prices and a jump by BCE Inc after Canada's top court backed the buyout of the telecom company....

· Dow -.33

· Dollar -.11c to $98.44.

· Oil +1.38 to $136.74US per barrel

· Gold -$16.50US to $887.20US

Bond Rates: http://www.bankofcanada.ca/en/rates/bonds.html <http://www.bankofcanada.ca/en/rates/bonds.html>


Bank of Canada ceases $1B in liquidity injections

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Record staff and Record news services The Bank of Canada says it won't renew a $1 billion term liquidity injection to chartered banks once it has matured on Thursday, a further sign that the central bank believes the credit crisis is easing in Canada. The central bank cited "continuing improvement in market conditions since the end of April'' for the decision. "Indicative measures of bank funding costs remain well below those in a number of other major currencies,'' the bank said in a statement. The bank has been providing two streams of $2 billion in cash injections through 28-day purchase-and-resale agreements since December, but has of late begun to reduce the rollovers to $1 billion upon reaching maturity. Yesterday's announcement effectively removes one stream with the second maturing on July 10.

CIBC likely to take another big hit after downgrades

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David Friend The Canadian Press

Canadian Imperial Bank of Commerce is likely to endure another multi-billion charge that could dig more than $2 billion out of its flesh in the third quarter, some industry watchers are predicting. Estimates ranged from $1 billion to more than $2 billion yesterday as analysts weighed in on Moody's downgrading monoline insurer XL Capital Assurance to junk late last week."We expect CIBC will write off its remaining fair value exposure to XLCA in its third-quarter 2008 results,'' Blackmont Capital analyst Brad Smith wrote in a note, putting the total writedown at $1 billion.