Archived IMT (2010.04.27)

USDCAD breaks 1.0070, making the case for a possible 1.0150 later in the week alongside the pullback in oil and gold. US crude risks extending losses towards $82.70, a break of which is ripe for calling up $80.30. Any upside today is seen capped at 84.30. Volatility could be elevated today as Goldman Sachs CEO Blankfein and VP Tourre appear before Congress today.

Goldmans 5-year credit default swap is at 172-bps, highest since May 2009. This represents the annual cost to insure $10 million (not $10K) of Goldman debt for 5 years. The CDS spiked to 107 bps after the April 16 SEC announcement to charge GS with fraud. As long as no retreat is seen in GS CDS, financials could remain pressured, which may weigh on the broader indices and gold.