By Mike Keerma
Global markets edged down on Friday after the European Central Bank voiced
concerns about the independence of Turkey’s central bank following
President Recep Erdogan’s contentious reelection in June. The Turkish lira
fell 20% on the week against the U.S. dollar, and Turkish stocks plummeted
in heavy trading. Stock markets in Europe, as well as in emerging markets,
sold off as investors feared a contagion effect of Turkey’s economic and
currency woes spreading into other vulnerable markets, against a backdrop
of continuing trade and tariff disputes. Toronto’s benchmark
S&P/TSX Composite Index
fell 0.6% on the week, as
retreated 1.3%. The
S&P 500 Composite Index
ended Friday down 0.3% on the week, while the
Nasdaq Composite Index gained 0.4% on the week fueled by momentum in the tech majors. In a classic risk-off trade as investors moved from equities
to safe haven assets,
gained 1.4% on Friday, but still closed down 1.3% on the week.
In Canada, employment statistics for July showed an increase of 54,000 new
jobs in the month, with the unemployment rate dropping to 5.8% from 6.0% in
June. Most of that gain (49,000) came in public sector employment,
apparently in the education sector, which is subject to wide swings in the
summer months. The gain is still an overall positive and could point the
way to another rate hike by the Bank of Canada in September.
In the U.S. the all-items consumer price index remained steady at an annual
2.9% in July, while the core index, which excludes more volatile food and
energy prices, grew to 2.4% year over year, suggesting continuing
underlying price pressures that are likely to keep the Federal Reserve
Board’s regular interest rate hikes on track in coming months.
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