Markets are quiet as we open off another week. Credit ratings agency Egan Jones downgraded the US credit rating; however, markets are shrugging off the news as EJ does not carry the same influence as S&P, Moody’s or Fitch.
Markets Ignore Weak US Data
The Empire Fed Manufacturing index in the US fell to the lowest level since 2009 (-10.4 vs. expectations of -1.9). Markets have ignored this data point as well as sentiment remains high after last week’s news of quantitative easing.
Spain has unofficially met with EU leaders to discuss a possible bailout request. Spanish Prime Minister Rajoy may be putting the cart before the horse though, as he sounds off on bailout conditions before even asking for one. Spanish banks continue to hemorrhage bank deposits as households lose confidence in domestic institutions. The Euro remains unchanged vs. the USD and CAD over the weekend.
Canadian foreign securities purchases rebounded in July, $6.67 billion, well above the previous -$7.76 billion but below the expected $11.30 billion. The Canadian dollar has weakened by 50 basis points since Friday’s close.
The TSX and Dow are trading lower, 20 and 25 basis points respectively. Commodities remain unchanged with Crude Oil at $99.25/bbl and Gold at $1,775/oz.