Oil slumps dragging TSX lower
The recent rally in oil prices came to an abrupt halt Tuesday as fears about the global economy and slowing demand dominated. US crude was down almost 5 per cent and Brent slipped almost 4 per cent.
The slump hit energy stocks, dragging the main TSX index lower for the second time this week.
The fears are not just about post-Brexit Britain and the ripple effects that may bring. Italian banks are showing worrying cracks in their finances with high debt levels; Japan and China’s economies are far from perfect; Australia has political uncertainty; and the US economy has been showing weaker signs than was expected.
Unsurprisingly, gold producers have gained once again Tuesday as price for precious metals rise.
Wall Street closed lower with the Dow off by triple-digits; Europe was mostly lower with London bucking the trend; and Asian markets closed lower except for Shanghai.
The S&P/TSX Composite Index closed down 39.30 (0.28 per cent)
The Dow Jones closed down 108.8 (0.61 per cent)
Oil is trending lower (Brent $48.18, WTI $46.83 at 4.35pm)
Gold is trending higher (1358.60 at 4.35pm)
The loonie is valued at U$0.7690
Canadian dollar set to weaken say currency experts
A poll of currency strategists by Reuters reveals that the Canadian dollar is expected to drop further in the coming weeks following a 0.7 per cent slide since the UK voted to leave the EU. The Brexit vote has led to a stronger US dollar and the loonie is now predicted to be 1.2 per cent lower in a month.
CETA trade deal suffers major setback
The planned trade deal between Canada and the EU has been dealt a major blow which could even see it fail altogether.
There was potential for the deal to be deemed “EU-only” which would mean the European Parliament would have ratified the agreement but it is now to face scrutiny and ratification by 38 national and regional legislatures across the 28 nation bloc.
The process will inevitably be a long one and is likely to be vetoed along the way, putting at peril its chance of ever being agreed.