North America

  • 2020-07-08 14:11

    By Greg Quinn

    OTTAWA (MNI) - Following are highlights from the Canadian Finance Department's annual Debt Management Strategy for the fiscal 2020-21 year, published Wednesday from Ottawa:

    The current environment provides a unique opportunity for the government to issue an unprecedented level of long term bonds at historically low interest rates. This will ensure Canada's debt remains affordable and is less vulnerable to increases in interest rates for future generations.

    In pursuing a historic level of issuance in long-term bonds, the government will consult over the coming months with market participants to assess the market's capacity for long-term debt.

  • 2020-07-07 15:53

    --Inflation Will Also Remain Subdued Due to Demand Shock

    Regional Federal Reserve Bank presidents Mary Daly and Tom Barkin on Tuesday highlighted risks that the U.S. job market won't return to normal and inflation will remain subdued through the Covid-19 restart.

    "I'm assuming that we will level off at some level that's not where we want it to be," because people may not visit stores and buy as much as they did before, Daly said of the labor market.

  • 2020-07-07 10:57

    By Pedro Nicolaci da Costa

    WASHINGTON (MNI) - Early hints of an economic recovery from the Covid-19-led slump are starting to peter out, Atlanta Federal Reserve Bank President Raphael Bostic said Tuesday, indicating some at the central bank are bracing for a more prolonged recession.

    More recent data suggest economic activity is "leveling off at a level lower than we were pre-crisis, which might suggest there is going to be some loss or that the time required to recover might be quite a bit longer than we might have otherwise expected," Bostic told a webinar sponsored by the Tennessee Business Roundtable.

    Until recently, Fed officials had been expressing confidence in a solid bounceback in the second half of the year after a historic second quarter downturn caused by ext

  • 2020-07-06 10:32

    --BOC Quarterly Poll Taken As Health Curbs Being Lifted

    OTTAWA (MNI) - The Bank of Canada's first quarterly business outlook published after the nadir of Covid-19 restrictions indicated companies were less pessimistic than they were during the 2008-09 recession as health lockdowns eased and governments stepped up with relief payouts.

    "Indicators of employment intentions, input price growth and credit conditions did not deteriorate as much as they did during the 2007- 09 crisis," the central bank said in a report Monday. "This is due partly to the government support offered to mitigate the impacts of the pandemic.

  • 2020-07-02 18:16

    By Evan Ryser

    WASHINGTON (MNI) - The Fed's balance sheet edged down for a third straight week as FX swaps and repos continued to roll off, Fed data released Thursday showed.

    The Fed's portfolio shrank USD73 billion to USD7.01 trillion, driven by a USD50 billion decline in FX swaps and a USD10 billion decline in repos. Usage of dollar swap lines by global central banks fell to USD225 billion from as high as USD450 billion only a month ago.

  • 2020-06-30 08:59

    By Greg Quinn

    OTTAWA (MNI) - Canada's GDP fell a record 11.6% in April and a flash estimate suggests output rose 3% in May, signaling a turnaround for the economy from Covid-19.

    The April decline was the largest in data going back to 1961 and covered all 20 major industries, Statistics Canada said Tuesday from Ottawa. Manufacturing dropped 22.5% as social distancing rules and border closures hindered production including a near total shutdown of automobile assembly. Petroleum and coal also dropped by a quarter amid a global supply glut.

    Retailing fell 22.9% with clothing stories down by two-thirds and car dealers down 41.8%. Online shopping boosted the "non-store retailers" category by 17.3%.

  • 2020-06-29 09:49

    By Greg Quinn

    OTTAWA (MNI) - The Royal Bank of Canada says consumer spending is recovering with the mid-June value of credit and debit card transactions just 2% less than year-ago levels, aided by the re-opening of personal services like haircuts.

    Gasoline and automotive service transactions nearly matched year-ago levels, as the most severe health lockdowns eased, data produced by the bank suggests. Hotel, airline and car rental spending remained about 75% lower from a year ago.

    Spending had plunged by almost 40% at the start of April and recouped about half of those losses a month later, RBC tracking using anonymous card data shows. Online retailers are holding on to most of the 80% jump in transactions seen in May from a year earlier.

  • 2020-06-29 07:01

    By Greg Quinn

    OTTAWA (MNI) - BOC Governor Tiff Macklem will likely get solid evidence of the economy's low point this week with a record decline in GDP for April and a narrower May trade deficit, setting the stage for his first policy decision July 15.

    GDP plunged 14% in April, according to an MNI economist survey. That report on Tuesday is followed the May trade deficit on Thursday, seen narrowing to CAD2.1 billion from CAD3.3 billion.

    Since taking over from Stephen Poloz June 3, Macklem has cited evidence the economy bottomed out early in 2Q and has a "deep hole" to climb out of, while pledging to restore only part of the forecasts the BOC dropped in April.

  • 2020-06-26 15:30

    By Greg Quinn

    OTTAWA (MNI) - The Bank of Canada's balance sheet climbed CAD12 billion to a record CAD521 billion led by federal bonds and bills this week while repos had their first significant decline since the coronavirus pandemic emerged.

    Federal bonds increased CAD8 billion to CAD160 billion, faster than the minimum CAD5 billion a week target, and t-bills by CAD6 billion to CAD124 billion. Holdings of repos fell CAD2 billion to CAD209 billion, according to figures the Ottawa-based bank posted Friday.

    Governor Tiff Macklem on Monday said QE is keeping yields low across the curve and will remain in place until the recovery is well underway, downplaying other tools like cutting the 0.25% policy interest rate any further.

  • 2020-06-26 11:34

    By Greg Quinn

    OTTAWA (MNI) - Global policy makers will begin shifting their focus from broad stimulus to more narrowly-targeted measures that better align messages about controlling Covid-19 and restoring the economy, former top Bank of Canada deputy Paul Jenkins told MNI.

    "It's still 'all hands on deck,' if you like, but the difference today versus four months ago is you've got four months of data and understanding," Jenkins said. "And as things evolve, we should be in a better position to make calculated judgments and therefore evolve the policy side of it."

    The recovery is too complex and uncertain for policymakers to attempt social engineering beyond a virtuous cycle of better health and restored jobs, said Jenkins, who was BOC Senior Deputy Governor from 2003-2010.