George Davis, chief fx technical analyst at RBC Capital Markets, said Monday's stock market declines point to a further downside.

"Yesterday's sell off produced significant short-term technical damage on the charts, and raises the prospect that risk aversion will stay elevated," Davis wrote in a client note. "The U.S. dollar should continue to benefit in such an environment."

The S&P 500 is higher by 9.80, or 1.2%, to 825.83. The Dow Jones industrial average is up 65 points, or 0.75%, to 8211. The Nasdaq composite is up 13 points to 1411. In Canada, the TSX composite index is gaining 54 points, to 8460.

European stock markets are mixed, with the Eurostoxx down eight points to 2022, the UK FTSE 100 down 12 points to 4054 and the German DAX up 35 points to 4430.

Asian markets were lower, with the Japanese Nikkei closing down 534 points to 7864 and the Hang Seng Index down 703 points to 13406.

Strategists say the event risk is minimal today, as there are no major data releases scheduled in Canada or the U.S.

The focus of the day will be on automakers, who will be releasing November's sales data throughout the day, culminating in national and domestic vehicle sales. Domestic vehicle sales are expected at 7.8 million, just shy of the 7.9 million reported in October, and total vehicle sales are expected to slide to 10.5 million from 10.6 million previously.

As well, Detroit's Big Three automakers, Chrysler, Ford, and General Motors, will unveil their spending plans to the U.S. Congress on Tuesday for how to use a combined $25 billion loan from government.

The Canadian dollar is up 0.0036 to 0.8048 against the U.S. dollar (1.2429 USD/CAD) and up 0.45 to 75.12 against the yen.

The U.S. dollar is up 0.16 to 93.35 against the yen and the Dollar Index is down 0.201 to 86.523.

The euro is up 0.0115 to 1.2724 against the U.S. dollar, up 0.0073 to 1.5813 against the Canadian dollar, down 0.0002 to 0.8467 against the pound sterling and is higher by 1.28 to 118.80 against the yen.

The pound sterling is up 0.0144 to 1.5029 against the U.S. dollar and up 0.0103 to 1.8676 against the Canadian dollar.

WTI crude oil is up $0.23 to $49.51. The front month gold contract at the Chicago Board of Trade is up $13.40 to $781.90 per ounce.

U.S. two-year yields are up 3.9 bps to 0.94%, with five-year yields up 2.6 bps to 1.74%, 10-year yields up 2.2 bps to 2.75% and 30-year yields up 6.4 bps to 3.28%. The Eurodollar March 09 contract is up 1.0 tick to 98.16. The yield curve is flatter, with the 10/2-year spread down 1.9 bps to 180.81 bps.

Yields on two-year Canadian government bonds are flat at 1.60%, with five-year yields up 1.2 bps to 2.30%, 10-year yields up 5.2 bps to 3.20% and 30-year yields up 4.4 bps to 3.80%. The December 08 BAX contract is down 2.0 ticks to 98.11.

In Germany, returns on two-year German bonds are down 1.1 bps to 2.11%, with five-year yields down 1.0 bps to 2.51%, 10-year yields down 7.0 bps to 3.09% and 30-year yields down 8.6 bps to 3.55%.

Yields on UK two-year bonds are down 20.2 bps to 1.84%, with five-year yields down 15.1 bps to 2.90%, 10-year yields down 13.0 bps to 3.53% and 30-year yields down 11.2 bps to 3.96%.

All data taken at 9:43 a.m. EST.

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

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