TSX down after eight straight gains
The S&P/TSX composite index was down about 60 points, or 0.5% to 12,085, with energy and financials leading the declines.
According to the Wall Street Journal this downward trend may have been sparked by the recent stress tests on European banks which underestimated the risky government debt they hold. In addition to this, the Association of German Banks said the country’s 10 biggest lenders could need about 105 billion euros in fresh capital because of new global regulations to come from the Basel Committee.
The Canadian dollar was down 34 basis points to US95.88.
The US markets, the Dow Jones industrial average was down about 70 points or 0.7% to 10,380 at midday. The Nasdaq composite index fell around 15 points or 0.7 % to 2,220.
Source: www.financialpost.com
Oil prices fall
Tuesday, September 7, 2010: Oil prices fell sharply below US$73 a barrel as the dollar strengthened against the euro. The dollar’s surge against the euro pushed down the oil prices by making crude more expensive for investors trading in the weakening currencies.
Oil has mostly traded in the mid-$70s this summer as investors struggle to gauge how much global economic growth may slow in the second half and how much that will affect crude demand. Most analysts expect the US economy won’t slip back into recession.
Source: www.advisor.ca
Basel Committee agrees on tougher capital rules
Central bank and regulatory officials agreed to tougher new global bank capital rules but will keep investors on tenterhooks until Sunday when formal endorsement is expected.
The Basel Committee ended its meeting with recommendations on how much extra capital banks will have to hold in future to avoid governments having to bail out the sector in the next crisis, a source familiar with the process said. It also agreed to arrangements for phasing in higher standards on the quality of capital banks must hold in future.
The recommendations will be put to the Group of Governors and Heads of Supervision, chaired by European Central Bank President Jean-Claude Trichet, which meets in the Swiss town of Basel on Sunday.
Source: www.financialpost.com