Canada's Road to Recovery Continues

Ralph Shell submits: With this week winding down, the economic numbers early next week may stir up some early week action in the Forex markets. This is a good thing. With the football season finally over, and baseball and basketball's March madness weeks away, things are slow for Vinnie the bookmaker and his patrons.

Ralph Shell submits: On Friday, when the world was apprehensive about chaos in Egypt and the possibility of other Mid-Eastern uprisings over the weekend, the Canadian dollar sold off to parity versus the USD. The Egyptians control the Suez Canal, the route for about 3 million barrels of daily oil shipments, so the spike in oil prices was not a surprise. Since Canada is a good neighbor producer of over 3 million barrels a day, the weakness in the loonie was a bit curious.

Ralph Shell submits: Economic data continues to disappoint those who have labeled this the summer of recovery. Weekly unemployment claims were 472k, higher than the expected 454k and 459k in the previous period. The ISM Manufacturing PMI was worse than expected at 56.2, less than the expected 58.9 and under the previous period's 59.7. Pending home sales were expected to be lower, down 7.4%, but the 30% plunge was much worse than anticipated.

Ralph Shell submits: Since October the Loonie bulls have had their sights on parity with the dollar, only to have the market fall short of their objectives. Central Bankers expressed concern that the strong Cad would hinder the recession recovery, but this did not deter the speculators from accumulating big longs in the futures market. At one time the open interest in the Cad futures market was larger than all other futures contracts except the euro.

Ralph Shell submits: The economic news failed to confirm the global economies were back sliding into another recession. The highly regarded measure of Euro confidence as measured by the Ifo Institute for Economic Research was 106.7, better the the expected 105.8 and the previous month's 106.2. In the US, the Core Durable Goods orders were up 2.0%, better than the anticipated +0.9, and the previous month;s -2.0.

Ralph Shell submits: On a day when the equities market is tanking, leave it to CNBC to haul out the economic trash talkers like Nouriel Roubini. Stocks are due for another 20% decline and cash is the safest place, he claims. If the mattress is getting lumpy, put some cash in the survival room along with your gold coins, dry food and the organic seeds that are guaranteed to grow after global crises. Dr.