These are stories Report on Business is following Tuesday, Oct. 2, 2012.
High prices at the gas pump bringing you down? According to the latest study, parking’s not much better.
The average median rate for an unreserved spot climbed 2.7 per cent over the last year in Canada to $241.72 a month, according to the study released today by Colliers International.
Like last year, Calgary still holds the “dubious title” as the most expensive in Canada, Colliers said.
The real estate firm compared the centre of the oil patch to other major cities on the continent, and found the monthly median at $439.93 (U.S.), second only to New York and well ahead of Boston and San Francisco.
While Calgary may be the most expensive in the country, costs rose just 2 per cent, compared to almost 12 per cent in Montreal, 8.3 per cent in Regina and 7.3 per cent in Edmonton.
According to Colliers, I got a break in Toronto, where prices fell almost 5 per cent. Vancouver prices also fell, by 3.5 per cent.
“The limited availability of new parking spots in major city centres across Canada is also reflected in parking lot waiting lists,” the company said.
“The average waiting time for a parking spot in Canada is currently just under eight months, with motorists in Victoria, Halifax and Regina expecting a waiting period of between 12 to 24 months.”
Investors are in an upbeat mood so far this morning.
Tokyo’s Nikkei inched down 0.1 per cent, but European stocks are higher and New York appears headed for a stronger open.
London’s FTSE 100, Germany’s DAX and the Paris CAC 40 were up by between 0.2 per cent and 0.3 per cent by about 9 a.m. ET.
Dow Jones industrial average and S&P 500 futures rose.
“Equities are building upon yesterday’s rally in tamer fashion and in the absence of much of anything new overnight as some key Asian benchmarks like the Hang Seng and Shanghai are shut for holidays,” said Derek Holt and Dov Zigler of Bank of Nova Scotia.
“Bonds are rallying across the curve in Spain … as Spanish 10s are approaching their yield lows in the aftermath of the [European Central Bank’s] conditional bond-buying announcement on Sept. 6 but remain unsustainable in the context of pressures on Spanish finances,” they said in a research note.
“Treasuries are flat and continue to signal something a little more disconcerting than other parts of global capital markets as 10s hang in just above the 1.6-per-cent mark. Then again, the Dow is still off of its Sept. 20 high and has been trending largely sideways since mid-September.”
Australia cuts key rate
Australia’s central bank trimmed its benchmark rate today amid the uncertain outlook for the global economy, notably in China and Europe.
The Reserve Bank of Australia cut the key cash rate by one-quarter of a percentage point to 3.25 per cent. It’s the third time this year it has done so.
“Economic activity in Europe is contracting, while growth in the United States remains modest,” said central bank Governor Glenn Stevens.
“Growth in China has also slowed, and uncertainty about near-term prospects is greater than it was some months ago,” he said in a statement.
“Around Asia generally, growth is being dampened by the more moderate Chinese expansion and the weakness in Europe. Key commodity prices for Australia remain significantly lower than earlier in the year, even though some have regained some ground in recent weeks.”
It’s always worth watching developments in Australia given the similarities between the Australian and Canadian resource-based economies.
Both countries are impacted by fluctuations in commodities prices, and both have strong currencies.
Many of the issues for the Australian and Canadian central banks are the same, said senior currency strategist Camilla Sutton of Bank of Nova Scotia, though the pressures aren’t as strong for the Bank of Canada.
“Once again, the RBA observed that the exchange rate has remained higher than might have been expected given the decline in export prices and weaker global activity growth,” added Adam Cole of RBC in Europe.
“The key to the longer-term impact of today’s cut will be whether the market interprets it as merely bringing forward to the rate cuts that were expected later in the year, other whether today’s cut marks an acceleration in the pace of easing that will ultimately see rates fall further than previously thought.”
Spain seen headed toward bailout
Speculation is mounting today that Spain’s embattled government will soon seek a full bailout, possibly within the next several days.
This would be on top of the rescue of Spain’s banks in a deal struck in June.
As always, however, it’s far from clear cut, and Germany may be standing in the way, according to the latest reports.
Germany, of course, has been the deep pockets in the bailouts of the 17-member euro zone’s troubled economies, and, clearly, has issues with funding more.
“Yesterday’s market rebound suggests that markets believe that at some point fairly soon Spain will feel compelled to request further aid, in addition to the banking bailout agreed at the June EU summit,” said CMC’s Mr. Hewson.
“There have been some reports out of Europe which suggest that an aid request may be forthcoming fairly soon, however a certain recalcitrance on the part of Germany suggest that such a request may not be as straightforward.”
Iran's currency sinks
It’s difficult to get hard information on Iran’s economy, so I’ve cobbled together bits from various news reports and analysts. The bottom line: Iran’s economy is in trouble and its currency is plunging amid sanctions by Western nations.
According to Reuters today, Iran’s currency, the rial, is now worth just two-thirds of where it stood a week ago. The sanctions over the country’s nuclear program mean Iran can’t bring in as many U.S. dollars, or other currencies such as the euro, as its oil exports suffer.
Quoting the Fars news agency, Reuters reported that Iranian authorities are now blaming, and threatening, currency speculators, though, of course, many say the government is at fault.
Yesterday, The Associated Press reported that thousands of Iranians are displaying their anger of the state of the economy amid surging inflation, high unemployment and lagging wages. Officially, inflation is running at 23 per cent and unemployment at 12 per cent, though AP reports that economists believe both are much higher.
“We have greater expectations that the security services will control the branches and sources of disruption in the exchange market,” Iran’s industry minister, Mehdi Ghazanfari, warned, according to the news agency.
“Uncertainty in Iran is generally never good for oil prices, while continued sanctions by Western countries look set to undermine the rial further,” said senior analyst Michael Hewson of CMC Markets in London.