Thursday, Oct. 20, 2016 11:38AM EDT
Not much was expected to happen at Thursday’s European Central Bank meeting and not much did happen, except numb journalists guessing what colour tie ECB boss Mario Draghi would wear (it was a rather dull blue-and-white number).
But not a lot needed to happen because the euro zone economy, lubricated by the ECB’s massive quantitative easing program, is ambling along fairly well, thank you very much. In no way did the ever-staid Mr. Draghi declare victory, but he could not resist some self-congratulatory remarks. “Our policy is being transmitted more and more effectively to the economy,” he said at the Frankfurt press conference after the ECB’s governing council meeting, adding that “low rates have worked.”More »
Wednesday, Oct. 19, 2016 5:17PM EDT
The Bank of Canada just came much closer to cutting interest rates than anyone would have dreamed before Wednesday’s rate announcement. Now, there’s nothing blocking the path to a rate cut early next year – including the housing-market dilemma that until recently formed an imposing obstacle.
The bank’s rate announcement and accompanying quarterly Monetary Policy Report made for bleak reading: Slashed economic growth forecasts, lowered inflation expectations, structural damage in the export sector that may have permanently impeded its progress, an anticipated hit to growth from Ottawa’s recent tightening of mortgage rules.More »
Wednesday, Oct. 19, 2016 5:00AM EDT
GLEN HODGSON AND DANIELLE GOLDFARB
The BRIC countries – Brazil, Russia, India and, in particular, China – led the rise of emerging markets for more than a decade. But the BRICs have cracked – collectively, they are no longer leading the way. Indeed, their economies are headed in very different directions.
To be sure, there are still tremendous opportunities for Canadian companies in emerging markets. According to the International Monetary Fund, developing-country markets represent half of the global economy in terms of purchasing power parity, and are growing much faster than industrial countries. The United Nations Conference on Trade and Development reports that developing economies represent half of the top 10 host economies for flows of foreign direct investment. But business leaders and policy makers have moved beyond the BRICs as a grouping.More »
Tuesday, Oct. 18, 2016 4:42PM EDT
The on-again, off-again resurgence of Canada’s manufacturing sector just might be on again. But after so many false starts, how can we be sure that this latest growth spurt is the beginning of that elusive sustainable upswing that the economy so sorely needs?
Maybe when we see the jobs. Which, unfortunately, is not yet.More »
Tuesday, Oct. 18, 2016 5:00AM EDT
The results of U.S. presidential elections always have major implications for Canadians. This time around, we may just see a boost to progressive politics north of the border.
It seems likely that Hillary Clinton will win big over Donald Trump, and that Democrats will also do very well in the Senate and House of Representatives races, perhaps sufficiently well to win control of both houses.More »
Sunday, Oct. 16, 2016 5:10PM EDT
The Bank of Canada got what it was looking for with the Canadian economy’s third-quarter comeback. This week, we’ll see whether the central bank is feeling nearly as good about the far-less-certain prospects beyond the current rebound – and how that colours the outlook for interest rates.
On Wednesday, the bank will release its latest interest-rate decision, together with its quarterly Monetary Policy Report, containing its closely scrutinized forecasts for the Canadian economy. It’s the first update of the bank’s economic outlook since July – and the economic data have been on a roller-coaster ride in the intervening period. The question is whether the economy has emerged from the turbulent summer still on the course that the bank had envisioned.More »
Sunday, Oct. 16, 2016 4:36PM EDT
South Korea’s central bank kept its key interest rate unchanged Thursday at a record low 1.25 per cent after assessing such risks to the recovering economy as slowing export demand, soaring household debt and a likely rate hike later this year by the U.S. Federal Reserve.
One other deepening worry loomed over the policy meeting: The sea of troubles engulfing Samsung and Hyundai. South Korea’s two largest conglomerates account for at least one-third of Asia’s fourth-biggest economy. So any serious corporate woes are bound to have an outsized impact.More »
Friday, Oct. 14, 2016 4:06PM EDT
The notion that Wallonia, a largely French-speaking corner of Belgium, could actually kill the sweeping Canada-Europe free-trade deal seems absurd.
It’s like the tiny fictional European Duchy of Grand Fenwick declaring war on the United States in the 1950s novel and movie The Mouse that Roared. (Spoiler alert: Grand Fenwick wins.)More »
Friday, Oct. 14, 2016 3:44PM EDT
Who will be next to follow Britain out of the European Union? With 28 member countries in various degrees of irritation with the EU , surely Britain’s exodus cannot be a one-off event.
The punters are already sizing up Italy, Greece, France, the Netherlands, Austria, Hungary and Finland as potential truants. Of the lot, Italy seems closest to the edge. Its December referendum on constitutional reform, if lost, could trigger a snap election whose potential victor is the anti-euro Five Star Movement.More »
Friday, Oct. 14, 2016 5:00AM EDT
BRIAN LEE CROWLEY
Prime Minister Justin Trudeau is correct that Canada has much to learn from China. It is just not what he thinks we should learn.
His government’s pivot to China is clearly shaping up to be a signature policy, showcasing Canada’s new attempt to pursue “sunny ways” while at the same time giving our economy a boost by embracing China’s economic miracle.More »
Thursday, Oct. 13, 2016 11:07AM EDT
The Brexiteers in the Tory cabinet are shrugging off the collapse in the pound. After all, sterling has been through crises before. It will take more than short selling by a few avaricious hedge fund managers to stop the tide of English nationalism, they reckon.
However, what the Brexit clan may not have bargained for was that other nationalist tribe: the Irish.More »
Wednesday, Oct. 12, 2016 5:12PM EDT
I have a nightmare.
It’s Nov. 8, election night in the United States. Contrary to every current poll, Donald Trump squeaks out a narrow victory. As his fans erupt in manic cheers, he kisses Melania, steps to the podium and peels back his fleshy mask to reveal – the grinning face of Warren Buffett.
It’s at this point that I usually jolt awake and come to my senses. Two men could not be more different than the Manhattan goon and the Omaha tycoon, I tell myself.More »
Wednesday, Oct. 12, 2016 4:38PM EDT
If Donald Trump wants to convince American voters that a Canadian-style public health system would be a “disaster” for the United States, he doesn’t need to trumpet dubious claims about Canadians fleeing the system in droves to get treated in U.S. hospitals. He’d make a more compelling case talking about the rising tide of costs that threaten to eventually swamp Canada’s government finances.More »
Monday, Oct. 10, 2016 4:51PM EDT
Among the contenders for this year’s Nobel Prize in economics was a Yale University professor named John Geanakoplos, whose work focuses on what’s known as “the leverage cycle.” While he didn’t win the prize – it was awarded Monday to a Finnish and British team – the fact that Mr. Geanakoplos attracts this level of critical acclaim should serve as a wake-up call to Canadian homeowners.More »
Friday, Oct. 07, 2016 6:06AM EDT
For buyers of British equities, Brexit didn’t seem to matter.
Since late June, shortly after Britons voted to leave the European Union, the FTSE-100 has marched ever upward and now trades near record highs. The FTSE-250, whose members companies are focused on the British economy, has reached an all-time high. The British economy was strong, the Bank of England was working its magic and many economists and business commentators agreed that what the Leavers dubbed “Project Fear,” the forecasts of economic doom spun by the Brexit-fearing mob, proved to be false alarms.More »
Thursday, Oct. 06, 2016 3:32PM EDT
Theresa May, Britain’s new Prime Minister, has turned the political page. She says the little people are in charge, globalization is over, bad bosses are to be brought to account and even central bankers must be brought to heel.
In her keynote speech at the Tory Party conference, she declared herself champion of a quiet and as-yet-unfinished revolution that started when the British people voted to leave the European Union. She will be interventionist, a scourge of bad business owners. She will meddle with markets, if necessary, for the benefit of “working people” and in a barbed comment that will still be ringing in the ears of Mark Carney, Governor of the Bank of England, Ms. May let rip at the bank’s cheap money policy.More »
Wednesday, Oct. 05, 2016 4:46PM EDT
In a year when Canada’s vaunted export engine has misfired, stalled and spewed plumes of black smoke with unsettling frequency, one shouldn’t diminish the turnaround of the past two months. But while the good news coming from August’s trade figures is welcome and even relieving, it’s too early to start equating improvement with momentum.More »
Tuesday, Oct. 04, 2016 4:49PM EDT
It should come as little surprise that a company that emerged only recently from one of the biggest flame-outs of this oil-patch downturn is stepping gingerly.
Sanjel Energy Services provides some very specialized tasks for oil and gas drilling, especially compared to the former Sanjel Corp., which was broken up in creditor protection last spring, its assets split among Canadian and U.S. private-equity firms at fractions of their onetime book value.More »
Monday, Oct. 03, 2016 6:40AM EDT
Prime Minister Theresa May’s decision to push for a “hard Brexit” has sent sterling tumbling and raised concerns among some businesses that Britain will face more uncertainty.
The pound fell sharply on Monday morning, down as much as 1 per cent to $1.2844 against the U.S. dollar, the lowest level in seven weeks. It is also down 12 per cent against the euro since the June referendum on leaving the European Union.More »
Sunday, Oct. 02, 2016 4:45PM EDT
Canada’s free-trade deal with Europe has emerged as a sort of Holy Grail for believers.
It is much more than an arcane agreement linking Canada and the 28 countries of the European Union. The Canada-EU Comprehensive Economic and Trade Agreement, or CETA, has become a powerful symbol of open markets in a world of rising protectionism.More »
Friday, Sep. 30, 2016 3:32PM EDT
For an investment bank, nothing beats market volatility. Big up and down price fluctuations, or their expectation, create trading opportunities. Flat markets do not. Brexit created a gorgeous opportunity to make (and lose) fortunes; anyone who shorted the British pound came out on top. Italy could become the next trading opportunity as the European Union apparently trundles toward the cliff.More »
Friday, Sep. 30, 2016 5:00AM EDT
BRIAN LEE CROWLEY
Another government, another promise to spur innovation. Innovation Minister Navdeep Bains has innovated (irony alert!) in setting afoot a long period of consultation and hiring a tech executive to advise him. We are told to expect a new innovation policy in mid-2017.
Here is my contribution to the Minister’s listening exercise. Let’s start with a definition: innovation is human ingenuity successfully applied to solving concrete problems.More »
Wednesday, Sep. 28, 2016 3:06PM EDT
In order to understand Brexit properly, you need to look back in history and the best precedent is probably more than four centuries ago when Henry VIII dissolved England’s ties with the Church of Rome.
Brexiters love the analogy, in which Brussels plays the part of the Vatican City and the European Commission is a conclave of scheming cardinals with Jean-Claude Juncker as its pope. It plays all the right notes for the anti-EU partisans – a foreign and mysterious bureaucracy with imperial ambition making rules against which there is no appeal The idea that Brexit is a sort of rerun of the Protestant Reformation was mooted in the runup to Britain’s referendum on EU membership and it is gaining traction. You might wonder what an archaic religious quarrel has to do with political rows in the European Union. However, both are about the relationship between individuals and established authority and some people think that the roots of euroskepticism lie in Protestant rebellion against a centralizing and overbearing Catholic elite.More »
Wednesday, Sep. 28, 2016 5:00AM EDT
GLEN HODGSON AND MICHAEL BURT
Glen Hodgson is senior fellow and Michael Burt is director of industrial and economic trends at the Conference Board of Canada.
Manufacturing is still an important part of Canada’s economy. The sector directly accounts for about 10 per cent of Canadian gross domestic product and half of our exports, making it larger than the energy sector. However, its role in the economy has been steadily shrinking. Manufacturing employs half a million fewer Canadians today than it did in 2000.More »
Sunday, Sep. 25, 2016 5:10PM EDT
Do you feel that surge? This is what now passes for an economic rebound.
When Statistics Canada unveils gross domestic product figures on Friday, forecasters expect the number for July to demonstrate a continued bounce back from May, when Alberta wild fires devastated national output.
The problem is that “Canadian economic recovery” is now beginning to rival “Maple Leafs rebuilding program” as one of those trends that is always in progress, but never with a noticeable payoff.More »