The recent statement by U.S. President Donald Trump opening the door to wiping out Puerto Rican debt in the wake of the destruction wrought by Hurricane Maria on that island had an impact on Puerto Rican bonds, which plummeted in trading yesterday. The president’s advisers were quick to clarify his comments, but the harm had already been done! Bonds maturing in 2035 are now trading at less than 35% of their face value! The island never recovered from the economic crisis of 2008 and the situation has deteriorated to the point where in May, the governor of Puerto Rico had declared that the territory was facing a situation of bankruptcy.
The situation in Spain remains tense, with mounting concern regarding the possibility of a declaration of independence by Catalonian separatists. Pressure continues to be felt on the euro and Spanish stocks.
In addition to speeches by four U.S. Federal Reserve members, a number of indicators are on tap today in the United States. We’ll be keeping an eye on Initial Jobless Claims, Trade Balance, Factory Orders and Durable Goods Orders. The Canadian dollar is stable and the euro is down slightly against the greenback.
Emmanuel Tessier-Fleury
Range of the day: 1.2425 – 1.2535