Judging by the substantial decline in market volatility in the past few days, the global economy seems to have by and large sorted out its pressing recent concerns. Fears stemming from Ebola are subsiding, oil is stabilizing and Gold continues to climb while the timetable for a tighter monetary policy in the United States has been pushed back.
A similar situation also holds true in the United Kingdom, where decision makers are divided and concerned about the country's weakened growth. However, this lull could be short-lived, at least in Europe, as the Old Continent's banking sector is once again in the spotlight. It has been reported that at least 11 banks (including 3 in Greece, 3 in Italy and 2 in Austria) have failed the landmark stress test. An official report will be released on Sunday.
In the meantime, we will be carefully monitoring the Bank of Canada's Key Rate Decision at 10:00 this morning, preceded by Canadian Retail Sales and U.S. Inflation at 8:30. The name of the game continues to be trying to guess when interest rates will rise.
Good luck.
Stéphane Goulet