German Bailout Participation Confirmed Legal, BoC Next

German Constitutional Court rules that Ezone bailout is legal, UK manufacturing and industrial data were mixed. German Industrial production pushed higher. Market turns to BoC rate decision, Canadian Ivey PMI and Fed'ss Beige Book. Also details on Ashraf's appearance in this week's TORONTO MONEY SHOW below.

Euro bounced almost a full cent after German Constitutional Court ruled that German involvement in Eurozone bailouts is legal and rejected all lawsuits that were aimed at blocking country's participation in the financial assistance. However, the court said that the Parliament must have a say in decisions, which burdened Germany's budget. The bounce proved to be short lived as EURUSD retraced all gains and currently trades below the pre-release level.

German Industrial production rose by 4.0% in July after it declined by 1.0% in June which to some extent confirms Angela Merkel's earlier comments that Germany will continue to be Europe's growth locomotive and that so far "there are no signs of a recession in Germany".

In the UK, Halifax House Price Index fell 1.2% in August after a 0.2% rise in July. Manufacturing production rose 0.1% in July after dropping 0.4% in June (+1.9% from 2.1% y/y) and Industrial production declined 0.2% after unchanged print a month earlier (-0.7% from -0.3% y/y). The weak print is blamed on oil and gas rigs maintenance.

Recently, the data from the UK mostly disappointed which reinforces the removal of hawkish votes within the Bank of England's MPC

The New York session will bring Bank of Canada Overnight Rate decision and statement; due at 9:00 am ET. Analysts expect rates to remain unchanged at 1.0%. The accompanying statement is likely to point out concerns about the state of the global economy and declining growth.

At 10:00 am ET Canadian volatile Ivey PMI is due and it is seen slightly higher in August at 46.7 from July's 45.4. Despite the anticipated improvement, this would be a second reading in a row below the 50 level which indicates continued sector contraction.

At 2:00 pm ET the Fed releases its Beige Book that provides insights into the economic condition of each of the 12 Federal Reserve districts.

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