The commodity-heavy S&P/TSX composite index climbed to an all-time intraday high of 14695 shortly after Nymex crude oil briefly spiked to a record high of $126.40. However, it quickly pared its gains and is down $0.36 to $125.58 a barrel.

At 2:29 p.m. EDT, Toronto's S&P/TSX composite index is up 147 points to 14668, the Dow Jones industrial average up 99 points to 12845, the S&P 500 up 10 points to 1398 and the Nasdaq up 31 points to 2477.

European stock markets closed with the Eurostoxx up 11 points to 3239, the UK FTSE 100 up 16 points to 6221 and the German DAX up 33 points to 7036.

The growth of new housing prices in Canada slowed in March on both a monthly and annual basis, Statistics Canada reported. The slowdown continued a trend that began in September 2006 and was mainly the result of a softening market in Alberta, the statistical agency reported. Nationally, prices rose in March, in pace with economists' expectations of a 0.2% monthly gain.

In a speech to the Economic Club of Toronto, Canadian Finance Minister Jim Flaherty said cutting the debt and reducing taxes are cornerstones of the government's philosophy.

Yields on two-year Canadian government bonds are down 2.1 bps to 2.72%, with five-year yields down 4.3 bps to 3.11%, 10-year yields down 5.5 bps to 3.54% and 30-year yields down 3.9 bps to 4.05%. The Canadian 10-year note is yielding 19.85 bps less than the U.S. 10-year note.

U.S. two-year yields are flat at 2.24%, with five-year yields down 2.4 bps to 2.94%, 10-year yields down 3.6 bps to 3.73% and 30-year yields down 4.1 bps to 4.48%. The Eurodollar September 08 contract is down 2.5 ticks to 97.35. The 10/2 year spread flattened 3.69 bps to 148.80. The yield curve is flatter, with the 10/2-year spread down 3.7 bps to 148.80 bps.

British fixed income markets were down after numerous components of the UK's April producer prices data series rose to record highs. The Office for National Statistics said producers' input prices rose 2.4% in April from 1.7% in March, well above market forecasts for a 2.0% increase in seasonally adjusted terms. Year-over-year, April input prices rose 23.1%; the highest increase since records began in 1986. It follows a 20.5% rise in March and forecasts for a 21.7% increase.

Yields on UK two-year bonds are up 5.9 bps to 4.36%, with five-year yields up 4.3 bps to 4.31%, 10-year yields up 2.6 bps to 4.61% and 30-year yields flat at 4.46%.

In Germany, returns on two-year German bonds are up 5.9 bps to 3.76%, with five-year yields up 4.0 bps to 3.79%, 10-year yields up 1.6 bps to 4.01% and 30-year yields up 3.5 bps to 4.54%.

The Japanese yen is the main mover in foreign exchange following the release of several items of Japanese data in the overnight.

Japanese bankruptcies rose 8.3% year-over-year in April after rising 8.0% in March. Also, according to a survey by Eco Watchers, the current conditions index for Japan declined to a reading of 35.5 in April compared to March's 36.9 level. The economic outlook indicator fell to 36.1 compared to the previous 38.2 reading.

The Canadian dollar is up 0.0013 to 0.9961 against the U.S. dollar (1.0039 USD/CAD) and up 1.0400 to 103.3250 against the yen.

The U.S. dollar is up 0.8750 to 103.7350 against the yen and the Dollar Index is down 0.194 to 72.856.

The euro is up 0.0072 to 1.5554 against the U.S. dollar, up 0.0052 to 1.5613 against the Canadian dollar, up 0.0022 to 0.7945 against the pound sterling and is higher by 2.13 to 161.34 against the yen.

The pound sterling is up 0.0038 to 1.9578 against the U.S. dollar and up 0.0014 to 1.9654 against the Canadian dollar.

The front month gold contract at the Chicago Board of Trade is down $1.70 to $884.20 per ounce.

All data taken at 2:29 p.m. EDT.

By Adam Button, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, This email address is being protected from spam bots, you need Javascript enabled to view it