The
summer was pretty positive for equity markets with US and Canadian averages
climbing in August to post their third consecutive monthly gains. We’re
starting the new month with some weakness after US manufacturing activity
contracted again while the Chinese manufacturing figure released Friday night
was much lower than anticipated. Europe will take centre stage this week with
Thursday’s ECB policy meeting. The market is looking for some form of decisive
action from the bank, and ECB president Draghi is hinting that buying bonds at
the short end of the curve is a likely scenario. This has Spanish and Italian
yields dropping. The Bank of Canada will almost assuredly leave rates
unchanged in tomorrow’s announcement. BMO Capital Markets has pushed out
their forecast for rate increases to late 2013 at the earliest. The TSX
is down 27 pts. The Dow is down 84 pts.
The
Canadian dollar is down just 6 bps to US$1.0139. Bond yields are a couple of
ticks lower at 1.33% for the 5-year Canada and 1.75% for the ten. Gold is up $8
to US$1695/oz. Oil is down a buck to US$95.50/barrel.
Have
a great day.
Akila Senthil,AMP
416 895 4321
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