Financial Update

Loonie, stocks jump after bank boosts bid

TORONTO (Reuters) - Rallying financial issues helped pull the Toronto Stock Exchange's main index strongly higher on Monday, amid increased confidence in the value of bank stocks and a rush of bargain-hunting. Monday was the first time in nearly four weeks that the TSX has marked two consecutive sessions of gains, while March has been punctuated by large triple-digit swings to both sides.

· TSX +244.08

· Dow +187.32

· Dollar -.53c to $ $98.24US

· Oil -.98c to close at $100.86 US per barrel

· Gold $4.19 to $923.79

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

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March 25, 2008

Malcolm Morrison
The Canadian Press
TORONTO

Stock markets surged yesterday after JPMorgan Chase & Co. boosted its offer for rival Bear Stearns to $10 US a share from $2.

Toronto's S&P/TSX composite index closed below its high for the day, but still finished the session 244.08 points higher at 13,019.72.

Led by the financials sector, the advance was broad based with commodity stocks on the mend after turning in sharp losses last week on worries about lower demand.

In New York, the Dow Jones industrials gained 187.32 points to 12,548.64 as the U.S. market also saw a rare bit of good news from the housing sector.

"Financials have had quite a run from last week, it's impressive,'' said Vincent Delisle, portfolio manager at Scotiabank in Montreal.

"I don't know if the Bear Stearns deal coincides with the bottom, certainly last week's (interest rate cut) from the Fed and the Bear Stearns deal at 10 bucks is a positive surprise (but) from where it was trading a few weeks ago, it's still devastating.''

The TSX Venture Exchange added 19.42 points to 2,481.75 while the Canadian dollar moved up 0.53 of a cent to 98.24 cents US, after losing 3.6 per cent last week to its lowest levels in two months, on falling commodities and a burst of strength in the American currency.

The Nasdaq composite rose 68.64 points to 2,326.75 while the S&P 500 index added 20.37 points to 1,349.88.

The original price for Bear Stearns was part of a deal struck last week at the urging of the Federal Reserve and Treasury Department. The new offering has the backing of the Fed.

As part of the support for the revamped JPMorgan Chase offer, the Federal Reserve Bank of New York's $30 billion US special financing initially linked to the transaction was changed so that JPMorgan will take on the first $1 billion US of any losses suffered by Bear Stearns.

Bear Stearns shares rocketed $4.86 or 76 per cent to $11.25 US while JPMorgan shares advanced 58 cents to $46.55. National Association of Realtors also said yesterday that sales of existing homes rose by 2.9 per cent in February, after falling for six straight months.

Financial Update

Loonie's down but not out, say economists

· TSX +66.26 pts

· Dow +261.66

The Canadian dollar sunk to its lowest level in two months ahead of the Easter long weekend, settling firmly below par as commodity prices came off the boil

· Dollar -.78c to $ $97.71US

Oil prices closed Thursday down 9% from Monday's record high of US$111.80 a barrel

· Oil -.70c to close at $101.84 US per barrel

.Gold, which is commonly used as a hedge against the US dollar, tumbled as the greenback rose, ending the week low after hitting a record high of US $1033.90 Monday

· Gold -$25.10 to $919.60

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

Alia McMullen, Financial Post Published: Thursday, March 20, 2008

.Analysts say lower commodity prices over the course of 2008 will place downward pressure on the loonie amid concerns U.S. demand will fall as its economy weakens. But the past week's decline in the Canadian dollar is unlikely to continue, with the currency expected to linger near parity for at least another three months.

The loonie closed at US97.71 cents on Thursday. It was the currency's lowest close since Jan. 23, when it ended at US97.69 cents.

Douglas Porter, deputy chief economist at BMO Capital Markets said traders sold the commodities-driven loonie on the back of a shock decline in commodity prices, particularly oil and gold.

"It's a bit of a dangerous game these days," he said. "I doubt many people were looking for an 8% to 9% slide in commodity prices at the start of the week, and we have seen if anything, increasing volatility in a number of markets recently."

With traders away Friday for the Easter holiday weekend,. "We do think that the slowdown in the U.S. and the broader global economy will undermine commodity prices somewhat in the months ahead," Mr. Porter said.

However, he did not expect the loonie to continue to trend lower, with Canadian retail sales figures, due this Friday, expected to be strong, compared with a forecast for more weak U.S. housing data.

"Effectively we've seen the currency as swinging back and forth around parity since late last year and I'm not convinced we've broken out of that channel just yet," he said. "Through the second half of the year I think we might see a little more sustained softening in the currency and through 2009 when slower growth really starts to bite down on commodity prices."

Darren Richardson, corporate dealer at foreign exchange firm Canadian Forex said the U.S. dollar has had an upper edge since the U.S. Federal Reserve announced new measures to add liquidity to the credit system on Sunday, followed by a 75-basis point interest rate cut on Tuesday, which took U.S. rates down to 2.25%.

"Those definitely gave confidence back to the markets and opened an opportunity for the U.S. dollar. Commodity prices were the final trigger to help the U.S. dollar come back," Mr. Richardson said.

Despite the loonie's dive in recent days, he said the Canadian dollar would remain relatively strong.

"It's still in a very dominant position compared to the last 12 months," he said.

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Financial Update

Canadian dollar suffers biggest one-day drop since 1962

Sliding commodities send TSX plunging as commodity stocks retreat
· TSX -427.32 pts
· Dow lost all of Tuesdays surge -293 pts
· Dollar -$2.19 $98.49US
The April crude oil contract on the New York Mercantile Exchange lost 4.5 per cent, it's biggest one-day decline since 1991
· Oil -$4.82 to close at $104.60 US per barrel
Gold was slammed with its own biggest single day drop since June 2006, just less than a week after breaking the $1,000-an-ounce barrier for the first time and just two days since hitting a new record high.
· Gold -$59 to $945.30
· Bond Rates: http://www.bankofcanada.ca/en/rates/bonds.html

By David Friend, The Canadian Press

TORONTO - The loonie had its biggest single-day plunge in nearly 46 years on Wednesday, falling 2.19 cents against the American dollar as a bleak outlook for the world's economies also pushed down the price of key commodities such as gold and oil.

Canada's dollar ended the day at 98.49 cents US - the lowest close in a month. The currency had also fallen sharply on Tuesday and continued lower throughout Wednesday's session, but the momentum picked up late in the afternoon.

The last time the dollar had fallen this much was in May 1962 when John Diefenbaker's Conservative government pegged Canada's currency at 92.5 cents US, plus or minus one cent, after dollar volatility raged amidst a recession.

Commodity prices fell amid concerns that the troubles in the United States will spread throughout the world economy, including Asian countries that have been big buyers of Canadian resources.

"We've seen a fairly dramatic selloff in gold prices and as well with crude oil... that's put the Canadian dollar on the defensive at the same time," said George Davis, chief technical analyst at RBC Capital markets.

The slide came despite a report from the U.S. government that oil, gasoline and heating oil inventories were smaller than expected last week. Usually, smaller inventories tend to push up prices.

Gold was The price of bullion tumbled $59, or 5.9 per cent, to finish at $945.30 an ounce. On Monday, gold touched a record high of $1,034 an ounce.