G3 Recap 5-20-11

Main Items:

  • Canadian Core CPI rose 1.6% YoY in April as expected, vs 1.7% previously


  • German PPI rose 6.4% YoY in April vs 6.0% expected and 6.2% previously


  • Apologies for the low number of market comments recently, but there is just not a lot of clarity on the short term market direction right now. A potential growth scare via a mid cycle slowdown or the end of QE, along with the possibility of a Greek restructuring and the resultant fireworks continue to plague what are otherwise cheap valuations for equities and rich valuations for treasuries given a steady growth outlook.
    In the absence of clear market direction, it does not make sense to make outsized bets. There are some trades out there that present good value, (BoC on hold trades come to mind) but are really just opportunities to earn some income until the next big macro move becomes apparent. Stay tuned.