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The Canadian dollar topped90 cents US for the first time in seven months on Monday following a stronger-than-expected GDP report.

The economy grewby 0.4 per cent in February, thanks to higher activity in the energy sector, Statistics Canada said Monday. That was twice the growth rate forecast by analysts and led to speculation that the Bank of Canada would move sooner to raise interest rates.

“Upside surprises to the growth side will boost the odds that the Bank [of Canada]will be in rate hike mode earlier than our baseline forecast call for [0.75 percentage points] in the second half of next year,” RBC economist Dawn Desjardins said in a morning commentary.

The loonie was trading at 90.32 cents US in noon hour ET trading, up 0.71 cents from Friday’s close. The dollar has risen by more than three cents in April.

Statistics Canada said wholesale trade, manufacturing and financial services posted gains in February. However, there were declines in construction, retail trade, rail transportation and the accommodation and food services sector.

The energy sector saw a gain of 2.9 per cent as two months of mild weather gave way to more seasonable winter conditions. Electric power generation was up 3.4 per cent, while oil and natural gas extraction was up by 3.6 per cent.

Industrial production, which includes the output of mines, utilities and factories, advanced 1.3 per cent in February, with all three sectors posting gains.

Excluding oil and gas extraction and utilities, February’s economic activity grew 0.2 per cent.

A 15-day strike in February by conductors and yard-service employees at CN Rail led to a drop of 5.4 per cent in output of the rail transportation industry. This negatively affected exports in February, and led some enterprises to increase their use of trucking services to move their goods. Activity in the trucking sector grew by 0.6 per cent.

February’s growth figure topped the 0.1 per cent seen in January.

“This is just yet another sign that the Canadian economy is faring well in the face of a U.S. slowdown, and is clearly good news for the already high-flying Canadian dollar,” said BMO Capital Markets economist Doug Porter.

SEOUL (XFN-ASIA) - Service sector output expanded 4.8 pct year-on-year in March, easing from February’s 6.7 pct rise, with the real estate, education services, transportation and wholesale and retail sectors seeing a slowdown, the National Statistical Office said.

The growth rate was at its lowest level since a gain of 3.4 pct last October.

Seasonally adjusted, service sector output declined 1.2 pct month-on-month in March, reversing February’s 1.0 pct rebound, the NSO said.

Output growth in the real estate industry eased to 2.5 pct in March from 7.1 pct in February, reflecting a cooling-off in the property market after the government introduced a series of stricter measures to dampen prices.

Growth rates in the education and transportation service sectors more than halved to 3.8 pct and 4.2 pct, respectively.

Wholesale and retail sector output growth also dropped to 3 pct from 6.9 pct in February.

Financial and insurance sector output, however, accelerated to 10.6 pct from 8.3 pct.

Output by hotels and restaurants rebounded to 1.8 pct from a 1.2 pct contraction in February.

In the first quarter of 2007, service sector output grew 5.5 pct year-on-year, retreating from a 6.2 pct rise a year earlier.

eunkyung.seo@xinhuafinance.com

April 30, 2007 — Bache, one of the grand old names in Wall Street history, is making a comeback of sorts as insurance giant Prudential rebrands its global commodities business.

Long banished to the dusty archives of Wall Street lore, the Bache name is once again attached to Newark-based Prudential in the form of Prudential-Bache Commodities.

In 1981, after a disastrous attempt to help the Hunt Brothers corner the silver market, Pru bought Bache & Co. for $385 million, and tried to compete against the likes of Goldman Sachs and Merrill Lynch as Prudential-Bache.

The venture met with mixed success, but an infamous foray into risky limited partnership sales led to the dropping of the Bache name in favor of Prudential Securities.

Four years ago, much of the firm was sold to Wachovia Securities, although Pru retained an equity stake.

Globally, the new Prudential-Bache unit provides trading execution and margin for commodities traders, and the firm has developed a commodities index.

Prudential had retained the Bache name for its European operations, where the Hunt Brothers and the partnership sales debacles were of little consequence. In London, the unit will be known as Bache Commodities.

The renaming of the unit is being done to “streamline” and “emphasize the importance” of its global commodities business, said a Prudential spokesman. Already, staff is using the Bache domain name in e-mail and a new Web site is being designed.

Apple (AAPL) is sandbagging, Jim Cramer said Thursday on CNBC’s “Stop Trading!” segment.

Cramer said that, given the computer giant’s red-hot earnings report late Wednesday, the company’s below-consensus guidance is downright “insulting.” He said Apple’s obvious effort to talk down expectations shows once more that “press releases, unlike hips, do lie.”

Other than Apple, down $5 at $90, Cramer would generally shun tech, saying the season for buying technology stocks starts in August and runs through early January, with the annual Goldman Sachs technology conference.

Cramer wouldn’t buy PPG (PPG) , down 2% at $66.50, saying the U.S. economy is “not that strong” and the Pittsburgh-based industrial giant is “not out of the woods.”

LONDON (Thomson Financial) - Here are the top stories on Thomson Financial News

Alliance Boots recommends 10.6 bln stg offer from KKR/Pessina

LONDON (Thomson Financial) - The board of Alliance Boots PLC, the international health and beauty retailer, has recommended an improved 10.90 stg a share takeover offer from Stefano Pessina, executive deputy chairman and 15 pct shareholder, and Kohlberg Kravis Roberts (KKR), the US private equity group, the parties said in a statement.

The improved offer values the group at 10.6 bln stg, up from a previous indicative offer of 10.40 stg a share, worth 10.1 bln stg.

Sony Ericsson Q1 pretax jumps but touch below expectations as ASP falls

STOCKHOLM (Thomson Financial) - Sony Ericsson Mobile Communications AB said first quarter pretax profits rose by 139 pct to 362 mln eur, as sales rose 47 pct to 2.925 bln eur, boosted by strong handset shipments and improving operating margins.

But despite sharp increases, both numbers fell slightly short of market forecasts, which centred on a pretax profit of 368 mln eur and sales of 3.084 bln eur, according to a survey by SME Direkt.

Eiffage source presses for Sacyr cash bid amid ‘concert party’ claim

PARIS (Thomson Financial) - Intervention by French regulators may oblige Sacyr Vallehermoso to replace the all-share exchange offer it lodged for Eiffage yesterday with a cash bid, said a source close to the French constructor.

The value of the cash bid should be set at 129.5 eur per share, the last price at which Spanish shareholders bought Eiffage shares, the source told Agence France-Presse overnight.

Telefonica to study purchase of Telecom Italia stake over the weekend - report

MILAN (Thomson Financial) - Telefonica SA will study over the weekend the possibility of buying a controlling stake in Telecom Italia SpA, the daily Il Sole 24 Ore said without giving a source.

The daily said that Telefonica could seek to buy from Pirelli & C SpA a 66 pct stake in the holding company Olimpia SpA, which owns 18 pct of Telecom Italia.

Swiss Re, Friends Provident to announce longevity risk venture - report

LONDON (Thomson Financial) - Swiss Re is today expected to announce a deal with Friends Provident to manage longevity risk for 1.7 bln stg of annuities, the Wall Street Journal reported.

The foray into this segment of the market, in which insurers sell annuities guaranteeing customers a steady retirement income in exchange for premium payments, will be the Swiss reinsurer’s first.

Converium CEO says co in talks to find white knight

FRANKFURT (Thomson Financial) - Converium Holding AG is in talks to find a white knight bidder, averting a looming hostile takeover offer from French rival Scor SA, Handelsblatt reported, citing Converium’s chief executive officer Inga Beale.

“We are in talks with other partners,” including private equity investors, Beale told the newspaper.

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