June 18, 2010

Market Wrap: for the week ending June 18, 2010

• Gold reached a new all time high of $1262 per ounce on Friday (Reuters)
• Europe to publish stress test results of 25 big European banks (FT)
• UK will abolish the FSA giving more power to the Bank of England (Business Week)
• US current account deficit increased to $109.0 billion, or 3.0% of GDP in Q1 (ESA)
• Leading Economic Index (LEI) for the US increased 0.4 % in May (Conference Board)
• US consumer prices declined 0.2% in May on a seasonally adjusted basis (BLS)
• BP agrees on a $20 billion fund to compensate victims of the oil spill (AP)
• Russia may add Australian & Canadian Dollars to its international reserves (Bloomberg)
• Euro area employment was stable and EU27 down by 0.2% in Q1 of 2010 (Eurostat)
• Euro area annual inflation was 1.6% in May 2010, EU annual inflation was 2.0% (Eurostat)
• The Producer Price Index in the US moved down 0.3% in May, seasonally adjusted (BLS)
• US Industrial production advanced 1.2% in May after having risen 0.7% in April (NBER)
• US Building permits in May 2010 were 574,000, a decrease of 5.9% from April (ESA)

Weekly Market Barometers    
Stock-2010-0618   FX-2010-0618

Chart Of The Week  
Scotia Capital draws a slightly optimistic chart from Canada’s perspective while painting a rather gloomy picture of the risk profile for US sovereign debt.  The US is still the benchmark for typical assumptions towards investing in “risk-free” debt at this point.  While the perceived risk toward US government debt is nowhere close to the chart below, one should consider the possibility that the safe haven status might crumble somewhat and that the bull run of US Treasuries will slow down.

Source:  http://www.scotiafx.com/conference/CS-Monthly_FX_ConfCall_June_2010.pdf

Good luck and good investing! 

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