Insights

All eyes have been focused on the Middle East over the past two weeks, as the region has seen a sharp escalation in tensions following the Hamas terrorist attack on Israel and the responding military assault on Hamas in Gaza.

The second half of the summer has brought a slight decline in both equity and bond markets. Investors’ immediate attention is on third-quarter results from Canadian banks and takeaways from a major conference of global central bank leaders.

Global equity markets have declined slightly so far in August, aided by the U.S. credit rating downgrade by Fitch Ratings, one of three leading credit rating agencies.

Investors have been tasked with interpreting a flurry of global economic data over the past two weeks, including signals of resilient but moderating growth in North America, broadening economic weakness in Europe, and a stalled recovery in China.

The volatility of equity prices in global markets has recently been near multi-year lows, despite renewed uncertainty regarding the path of interest rates.