Temasek, which manages $134 billion in assets, has been approached, one of the sources told Reuters, but added it had made no decision on whether it will join the consortium that could counter BHP's (BHP.AX) $39 billion Potash Corp bid.

By Warren Hayhoe,

Columnist, Canadian Money Magazine

Central Trader, Jameson Bank

USD/CAD 1.0425
GBP/CAD 1.5971
EUR/USD 1.2743
GBP/USD 1.5322 
CAD/EUR 1.3282
JPY/CAD 80.38
 
Oil opened at $74.60, currently $73.29
Gold opened at $1249.80, currently $1247.40 
CRB closed at 272.77, +1.62

Morning Observations:

The Euro and the Aussie dollar look like Edward Norton after a run in with Tyler Durden in Fight Club - beat up. The multi-nation currency sold off versus 14 of 16 major currencies as new concerns were brought to light regarding their bank’s stress tests results, while the Australian dollar was sent lower by some rather dovish comments from their central bank after leaving rates on hold at 3.5%. On the other side of the safe haven trade , currencies like the Yen, Franc, and U.S. dollar are benefitting from the mayhem. Global markets are almost unanimously lower 1-2% this morning, and the question now becomes whether or not Mr. Carney has already decided what he is doing tomorrow from a rate perspective. The street’s expectation currently sits at a 65% probability of a rate hike and that probability is up by 15% from the middle of last week. Regardless, the price action in USDCAD today will be ultra sensitive to market sentiment with the interest rate decision hanging in the balance. Markets look hesitant to shrug off the negative sentiment this morning but have at least leveled off. Dow futures are only off 47bps currently and looks like they could climb back into the positive in no time with a little bit of incentive. Expected range in the USDCAD today is 1.0350-1.0450 

Thought of the Day

“Not admitting a mistake is a bigger mistake.”  --  Robert Half

LONDON (Reuters) – World stocks rose on Monday on hopes the U.S. economy can avoid slipping back into recession, although the International Monetary Fund's chief economist warned of weak growth in both the United States and Europe.

With U.S. markets closed for the Labour Day holiday, Friday's encouraging news about the employment picture continued to spill over into trading on Monday.

Some investors, particularly in Asia, were catching up with the U.S. jobs numbers, which were not as bad as some had feared. The slowing of the world's largest economy has been one of the major factors holding investors back over recent months.

WASHINGTON – Seeking ways to spur economic growth ahead of the November elections, President Barack Obama will ask Congress to increase and permanently extend research and development taxcredits for businesses, a White House official said Sunday.

Obama will outline the $100 billion proposal during a speech on the economy Wednesday in Cleveland, the official said. The announcement is expected to be the first in a series of new measures Obama will propose this fall as the administration looks to jump-start an economy that the president himself has said isn't growing fast enough.

The plan will invest about $50bn (£32.5bn) in roads, railways and airports as well as high-speed rail and the creation of an infrastructure bank.

US infrastructure has long been considered underfunded and receives poor grades from government agencies.

The move comes amid signs that the US economy is faltering.

On Friday, the US Labor Department announced that the US economy had lost a further 54,000 jobs, while the unemployment rate rose to 9.6%, from 9.5% in July.

NEW YORK – The stock market had its first winning week in a month thanks to better news on the economy.

The Dow Jones industrial average jumped 128 points Friday, its fourth straight day of gains. The strong start to September marked a turnaround from a dismal performance in August.

A better-than-expected report on employment Friday was the latest piece of improving news on the economy. Stocks also gained earlier this week following signs that manufacturing was gaining in the U.S. and China.

Even after its four-day run, which added 438 points to the Dow, the index is still 6.8 percent below the 2010 high it reached on April 26. Stocks had eased slightly after a report showed that the servicessector didn't grow as fast as hoped in August.

TORONTO/HONG KONG (Reuters) - Chinese officials have ordered state companies to meet investment bankers to explore ways to block BHP Billiton's (BHP.AX) $39 billion bid for Potash Corp (POT.TO), a source with direct knowledge of the matter said.

In response to the directive, Sinochem is holding meetings with several banks, the source said on Friday, including Citigroup (C.N), HSBC (0005.HK) and Morgan Stanley (MS.N).

The order from Beijing underscores the seriousness with which China is taking the potential BHP-Potash tie up and its implications for the pricing and supply of the crop nutrient, despite obstacles to launching a successful counter-bid.

Villa d'Este di Cernobbio on Lake Como, Italy

By DAN PERRY

CERNOBBIO, Italy – Is the global economy out of the woods? Two years after near-meltdown, with the U.S. looking sluggish, equity markets groggy and Europeans fighting a debt crisis, experts gathered in Italy offered a generally gloomy outlook — especially for the United States and much of the industrialized world.

The doomsayers were led by New York University economist Nouriel Roubini, who warned in booming tones that "there is a significant risk of a double-dip recession in the United States" as well as in Japan and many European countries.

Some of the assembled experts and leaders at the annual Ambrosetti Forum on the shores of Lake Como were somewhat more upbeat: economist Edwin Truman, a senior fellow of the Peterson Institute forInternational Economics, predicted that "the most likely global outlook is subpar growth."

LONDON (AFP) – European equities surged on Friday and the dollar jumped above 85 yen as financial markets welcomed a better-than-expected payrolls report in the United States.

The Frankfurt stock market leapt 1.17 percent, London bounced 1.13 percent higher and Paris added a hefty 1.72 percent after the upbeat news, which boosted investor appetite for risk.

In foreign exchange trade, the dollar rose to 85.17 yen from 84.30 yen in New York late on Thursday. The US unit meanwhile wobbled against the euro before pulling level.

By Yinka Adegoke

NEW YORK (Reuters) - News Corp (NWSA.O) Chief Executive Rupert Murdoch said the global economy is still in an uncertain state and the media industry is going through a fundamental transformation that is unpredictable

"I do not believe we are out of the turmoil yet. Sovereign debt pressures, soaring deficits and unacceptable U.S. unemployment levels are key obstacles to the global economic recovery," said Murdoch in a letter to shareholders in his company's annual report published on Thursday.

"Others may see more positive signs, but I believe until these issues are addressed, markets, governments, currencies and consumer behavior will be unpredictable," he said.

By Narayanan Somasundaram

SYDNEY (Reuters) - Goldcorp (G.TO) agreed to buy Argentina-focused gold miner Andean Resources AND.AX AND.TO for C$3.6 billion ($3.4 billion), trumping a competing offer from fellow Canadian miner Eldorado Gold Corp (ELD.TO).

The takeover is the latest in a series of gold-mining deals this year, including Australia's Newcrest Mining's (NCM.AX) $8.4 billion purchase of rival Lihir Gold, as near-record prices for the metal boost the hunt for reserves and pump cash into the sector.

A decline in government employment offset an increase in private-sector hiring and caused the U.S. economy to shed 54,000 jobs in August.

Underlying the overall drop was the encouraging sign that the private sector actually added 67,000 jobs during the month, the Labour Department said Friday.

That just wasn't enough to offset the 114,000 government jobs lost as Washington laid off temporary workers hired to conduct the census.

By Warren Hayhoe,

Columnist, Canadian Money Magazine

Central Trader, Jameson Bank

USD/CAD 1.0555
GBP/CAD 1.6264
EUR/USD 1.2835
GBP/USD 1.5410 
CAD/EUR 1.3550
JPY/CAD 80.00
 
Oil opened at $75.02, currently $74.40
Gold opened at $1252.10, currently $1252.50 
CRB closed at 271.15, +2.64

Morning Observations:

All eyes will be on the US jobs report this morning at 8:30am. First the bad news; the number will likely show that they shed 100K jobs in August which will  push their unemployment rate up to 9.6%. Secondly, and more importantly will be what the private sector produces, since it is seen as a better barometer of the overall economy. Consensus is that 50-80K new jobs were added to the private sector, attributed to cheap money and ample supply of labor.  

Overnight, most markets are relatively subdued ahead of the headline number at 8:30am. Commodity and equity markets are a little better than where we left them yesterday, while currency markets have all remained in very tight ranges. Don’t forget that a little later today the US ISM non-manufacturing number is being released as well. The sister report (detail) outpaced predictions, and expectations for this number are already high.

The good feeling permeating markets these past couple days will be hard to dispel, so the numbers today will have to be truly awful to cause any real sell off. If that happens, then all bet are off, however the more likely scenario of a mediocre number will be enough to maintain confidence and bring the fence sitters into the bullring. The expected range in USDCAD today if the number comes out anywhere close to expectations: 1.0475-1.0575.  

Thought of the Day

“Money can't buy love, but it improves your bargaining position.”  --  Christopher Marlowe 

By Rod Nickel and Joseph Chaney

TORONTO/HONG KONG (Reuters) - Chinese and other investors have approached at least one big Canadian pension manager about a bid for Canada's Potash Corp (POT.TO) to rival BHP Billiton's (BHP.AX) $39 billion (25.3 billion pounds) hostile offer.

Thursday's disclosure by Alberta Investment Management Corp, which manages some C$70 billion in public sector pension funds, is one of the first pieces of hard evidence to back suspicions that China is looking for a way to derail a takeover of Potash Corp by the powerful Anglo-Australian miner.

By Lucia Mutikani

WASHINGTON (Reuters) – Pending sales of previously owned U.S.homes rebounded unexpectedly in July and new claims for jobless benefits fell last week, helping dampen fears the economy could face a double dip recession.

The data on Thursday, including sturdy sales from U.S. retailers last month, followed a report on Wednesday showing a surprising gain in manufacturing activity and suggested the economy retained some underlying strength.

"This is an economy that has hit a soft patch. It's not an economy that appears to be heading toward a double-dip recession," said Brian Levitt, an economist at OppenheimerFunds in New York.