At the margin, markets continue to embrace risk on the back of Fed beige book comments yesterday that confirm the slowdown in US economic growth has not yet turned into a contraction.
In terms of hard data reinforcing this point, the US Trade Deficit for July was smaller than expected (-$42.8bn vs. -$47.0bn exp.) on the back of an increase in exports and a decrease in imports.
In Canada, Housing Starts for August were roughly in line with expectations and unlike the US, our Trade Deficit was larger than expected (-$2.8bn vs. -$0.8bn exp.) Regrettably, our exports declined (exports to the US declined and the gains in exports to other nations were insufficient to offset entirely) and imports increased.
The big Canadian data for Friday is the August employment report.