Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Loonie climbs

The Canadian dollar is almost back to where it began the year.

But if you’re savouring the suddenly stronger loonie, enjoy it while it lasts.

The Canadian currency, which touched a high of 83.82 cents U.S. and a low of 83.14 cents today, has been climbing along with oil prices.

It has also been buoyed recently by a weaker U.S. dollar and a brighter outlook from the Bank of Canada.

“While a touch below its recent high, the loonie has now gone almost full circle this year, and is now within shouting distance of where it started 2015 (86 cents),” said chief economist Douglas Porter of BMO Nesbitt Burns.

That’s good news for Canadian travellers heading south, and should ease some of the higher prices for imported goods that we’ve seen of late. It’s not the best news, however, for Canadian exporters, whose products are suddenly that much higher when sold into the United States.

But like other observers, Mr. Porter believes the currency will sink again.

He projects the Bank of Canada will continue with its more upbeat message, but that the U.S. dollar will strengthen. And oil prices are the “wild card,” he added in a research note.

“We suspect that, at best, [West Texas Intermediate] will average $60 through the rest of this year,” Mr. Porter said.

“With the U.S. economy and U.S. dollar likely to be rejuvenated in coming months, we look for the [Canadian dollar] to ease back toward the 80-cent level by year-end.”

Trican suspends dividend

Trican Well Service Ltd. is in rough shape amid the oil shock.

The Calgary-based company suspended its dividend last night, warning of debt troubles and sending its stock tumbling today.

It said it slashed 2,000 jobs in the first quarter of the year. It cut its “active equipment” in Canada by 35 per cent in March, and “downsized our U.S. pressure pumping operations substantially.”

The company suffered elsewhere in its global operations, as well, and is now negotiating to sell its Russian and Kazakhstan pressure pumping business after an unsolicited offer.

Trican, whose oil and gas services and equipment business operates around the world, had been paying a semi-annual dividend of 15 cents.

“Management has prepared forecasts for the remainder of 2015 and 2016 and forecasts a breach of its interest coverage ratio debt covenant during the second half of 2015 and first quarter of 2016 due to current North American pressure pumping activity and pricing being at cyclical lows,” the company said.

“Trican is currently in the process of negotiating covenant relief with all lenders. Negotiations are proceeding on an expedited basis and the company is optimistic that suitable covenant relief will be reached with all lenders prior to any potential covenant breach.”

Trican revenue plunged in the first quarter of the year to $476-1-million from $643.2-million a year earlier, while its loss widened to $35.7-million, or 24 cents a share, from $8.5-million or 6 cents.

Oliver slams Volcker Rule

Canada’s finance minister fired a shot across the bow of the U.S. regulatory system today, suggesting the Volcker Rule violates the North American Free Trade Agreement.

“I hope the United States administration sees that changing the Volcker Rule is in its own best interests and that of its biggest trading partner,” Joe Oliver told a conference in New York, according to Reuters.

He was referring to regulations named for former Federal Reserve chairman Paul Volcker in the wake of the financial crisis that bars banks from certain types of trading with their own money.

Home prices inch up

Canadian home prices rose in April for the fourth month in a row.

But hold that thought.

Here’s what National Bank senior economist Marc Pinsonneault said today as he released the Teranet-National Bank home price index which showed a rise of 0.2 per cent from March:

“Excluding the recession year 2009, the monthly change is tied with that of April 2013 for the smallest April advance in 17 years of index data. The slightness of the gain in 2015 came from the component indexes for Vancouver and Toronto, which were both flat from the month before and which together account for the 54 per cent of the composite index.”

Vancouver and Toronto, of course, have been the two hot Canadian markets.

Month over month, prices rose in Winnipeg, Quebec, Montreal, Halifax, Edmonton and Calgary, falling in the Ottawa region, Victoria and Hamilton.

On an annual basis, prices rose 4.4 per cent, a slower pace than in March.

“As the much anticipated spring market unfolds, Toronto and Vancouver home prices are expected to remain hot while other markets will likely catch the home-buying fever,” said economist Diana Petramala of Toronto-Dominion Bank.

Europe perks up

Some of Europe’s economies are picking up, but there are a couple of sour notes today.

The euro zone economy expanded in the first quarter by 0.4 per cent, according to the Eurostat agency, a better showing than the fourth quarter’s 0.3-per-cent pace.

Among the bigger economies, France had a nice bounce, at 0.6 per cent, and Italy did better than expected at 0.3 per cent, marking its first growth since late 2013.

German economic growth

But the pace of growth in Germany, the powerhouse of the monetary union, slowed to just 0.3 per cent, compared to 0.7 per cent in the last three months of 2014.

Greece suffered, too, sinking back into recession.

“The return to stronger growth across the euro area marks a significant improvement from a year ago and will help to buttress optimism that deflationary forces are ebbing away,” said economists at Société Générale.

“Though the euro area outperformed the U.K. and the U.S. in Q1, there is no reason to get carried away that this will be repeated in Q2.”

Separately, the Bank of England today trimmed its outlook for the U.K. economy, projecting economic growth of 2.4 per cent this year.

How Socrates might phrase it today

Default fears mount

Analysts are raising the spectre of a Greek default as the crisis morphs from dreadful to an “Alice in Wonderland” saga.

That doesn’t mean it’s still not dreadful, just that the latest developments show a government borrowing from the bank to pay off the same bank.

According to several reports, Athens headed off a default by tapping €650-million from its emergency International Monetary Fund reserves so it could make a widely watched €750-million payment to the IMF yesterday.

'We doubt that a deal can be made in that time'
Jennifer McKeown

“But the situation remains extremely precarious,” said Jennifer McKeown of Capital Economis.

“Greece was only able to pay the IMF by raiding its emergency reserves at the fund itself and the finance minister has warned that the government can only finance itself for another two weeks. We doubt that a deal can be made in that time.”

She’s not alone in that assessment, as negotiations between Athens and its international lenders have so far proved fruitless.

“Greece has been living hand to mouth for the past five years, and now that the last bailout is due to expire next month there is the very real prospect of a default,” said market analyst David Madden of IG in London.

“The country scrapped together what little free cash it had to meet the latest repayment, and is now living on a shoestring budget. If the Greek government doesn’t meet the demands of its creditors over reform, a default is in the pipeline.”

What’s interesting here is that the finance ministers of the euro zone, meeting in Brussels, had on Monday signalled positive developments.

And markets had heralded Greece’s announcement a day earlier that it was getting its payment to the IMF in the pipeline.

But then investors learned where that payment came from.

“The emergency funds available to all nations that deal with the IMF are legitimate, but it’s doubtful the original intended use of the facility was for countries to pay the IMF itself,” said analyst Jasper Lawler of CMC Markets.

“If anything, the fact that Greece couldn’t find the funds itself shows just how close to the brink it is.”

Which brings us back to the bizarre sequence of events.

“The [Greek crisis] continues to transform itself into an ‘Alice in Wonderland environment, as the ever-more complex web of payments and transfers baffles all but the hardiest of market watchers,” Chris Beauchamp, senior market analyst at IG in London, said in a research note.

A speech too far: What to do if you bomb like Elizabeth May

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Latest Videos

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies