Good morning,

Concerns over Greece are weighing down markets today; equities, commodities and commodity currencies are down across the board as the USD trades higher on risk aversion.

Moody’s has warned that they are preparing to downgrade 17 major banks across the globe, citing “more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions.”  UBS, Credit Suisse, and Morgan Stanley may have their ratings cut by as many as three levels by Moody’s.

US weekly unemployment claims continues to unexpectedly drop; jobless claims fell from 361K to 348K last week; expectations were calling for claims to rise marginally to 364K.  Meanwhile, January PPI rose less than expected, 0.1% vs. 0.3%, as food and energy costs fell easing inflation concerns. 

Canadian foreign securities purchases, direct foreign demand of CDN securities, slowed to $7.4b in December from $14.6b in November.  However, Canada’s AAA rating continues to attract foreign investors; transactions in December have capped off another solid year of non-resident investment in Canada.

North American markets are opening the morning marginally weaker, while European and Chinese equities are down 1%.  Crude Oil is soft, down 0.25% to $101.50, and the Canadian dollar is 10 basis points weaker against the USD.  Even Gold is selling off 1% on risk aversion, trading down to $1,715/oz.