Analysis: Power price declines bode ill for German economy

Consumer sentiment dropped to 54.9 from 63.7 in July, according to preliminary University of Michigan/Thomson Reuters index released Friday. Consensus had expected a reading of 61. The consumer confidence gauge confirms my thesis, discussed here, that depressed investor, consumer and managerial sentiment in August would cause the economic data published in September to be horrible.

[1:12pm ET Monday MLK Holiday] It’s not so easy to write about capital markets after being immersed for a week in a radically different culture as far removed from capitalism as one can imagine in this day and age. However, they say that when you fall off the horse, it’s best to quickly remount. So, here I am, back in the saddle. As for the markets this week, let’s see what happened regarding the Economy, Currencies, Bonds, Equities, Commodities and Precious Metals. I cannot sum it up in advance as in my study I will be looking at the latest data for the first time myself.

MONTREAL — A new report says Canada has moved up its economic ranking to sixth out of 16 countries — but it’s mostly due to the weakness of other countries. The Conference Board of Canada says the country has retained its “B” grade and improved its ranking from 11th since its last report card in pre-recession 2008, adding that part of the reason the surge is because some European countries going through tough times.

It's a quiet week in macro, but that doesn't mean there is nothing going on. Here is a summary of the key events happening in the coming week via GS and SocGen.

The Financial Times says IMF challenges Berlin’s crisis response The International Monetary Fund on Thursday challenged Berlin’s game plan for pulling the eurozone out of its crisis by advocating a series of short-term fixes that the German government has resisted.

German chancellor Angela Merkel and French President Nicolas Sarkozy proposed a "quick new stability pact" that allegedly will bypass the need for treaties. However, there is already disagreement over the role of the ECB. Please consider Germany, France plan quick new Stability Pact

Brian Dolan submits:EUR—That sinking feeling

Cliff Wachtel submits: Likely Market Movers To Watch This Week: Speculation About A Bigger Bailout Fund To Cover Spain: Many EU officials want it in order to kill off speculative attack on to-big-to-bail Spain, but Germany is thus far resisting the idea and thus helping keep anxiety high about spreading contagion to Portugal and Spain.One Or More Wildcards EU sovereig