These are stories Report on Business is following Wednesday, March 11, 2015.
Currency markets were a mess today, roiled by the continuing strength of the U.S. dollar and another drop in oil prices.
The collapse of the euro rippled across markets, and the Canadian dollar slipped to its lowest level in six years. Already weak, the loonie was driven even lower as oil prices slipped on a new crude inventories report in the United States.
The loonie touched a low of 78.14 cents U.S., its lowest over the past year, having been as high as 78.96 cents. By late afternoon, it stood at 78.4 cents.
"The USD rally continues to be supported by divergence between both policy and growth outlooks, with the recent leg higher a combination of several developments that all stem from pulling Fed expectations forward and soft global (non-U.S.) data releases," said chief currency strategist Camilla Sutton of Bank of Nova Scotia, referring to the U.S. dollar by its symbol.
What she meant by "Fed expectations" is that markets continue to speculate on a sooner-rather-than-later interest rate hike by the U.S. central bank, which could pull the trigger in June.
"We expect USDCAD to break new highs on the back of broad and violent USD strength, likely testing up through $1.28 and towards $1.30," Ms. Sutton said, referring to the U.S. currency against the loonie.
Looked at the other way, that would mean the Canadian dollar at just above 78 cents to just below 77 cents at some point.
"The most likely catalysts for this rally [in the U.S. dollar vs. the loonie] are likely to come from either oil prices coming under pressure or a deterioration in the domestic data set, with employment on Friday as a key risk," Ms. Sutton said, citing Statistics Canada's jobs report later this week.
She made that comment before the U.S. Energy Information Administration's weekly report on oil stockpiles, and that's in fact what happened.
The euro, in turn, is sinking ever lower toward parity with the U.S. dollar.
As our European bureau chief Eric Reguly reports, it fell to a 12-year low today.
"Plunging Bund yields are causing the EUR to fall at the fastest pace since its inception in 1999," said strategists at Société Générale, referring to the euro by its symbol.
"Only the Fed meeting next week appears capable of bringing the downtrend to an intermediate halt," they added.
"[European Central Bank] sovereign debt purchases, rising U.S. interest rates, EU portfolio outflows and EUR debt issuance by non-euro entities are likely to keep downward pressure on the euro."
The British pound also slipped.
"Nothing can stand in the way of the U.S. dollar, which continues to be the favourite for yet another day," said senior market analyst Chris Beauchamp of IG in London.
"Comments from Fed member James Bullard gave a further boost to the currency, but while dollar fans can rejoice U.S. firms will be increasingly worried that their competitiveness will be eroded in export markets, especially against their German and Japanese counterparts, whose currencies continue to slide."
If you happen to be planning a spring vacation, by the way, Paris is lovely this time of year. And the Canadian dollar sure looks better against the euro than it does against the greenback.
Indeed, noted chief economist Douglas Porter of BMO Nesbitt Burns, the Canadian dollar has gained about 13 per cent against the euro in the last year.
"Flipped on its head … the euro has plunged for nearby highs of C$1.55 about a year ago to barely $1.35 today," Mr. Porter said.
"The all-time low for the euro of just over C$1.20 looks a bit out of reach, at least for now," he added.
"But if oil prices recover even slightly, it could be doable in 2016."
- Follow our Inside the Market blog (for subscribers)
- Oil drops as U.S. inventories climb to fresh high
- Eric Reguly: Draghi lauds QE as a buffer from Greek crisis, euro sinks again
- Video: Seeking a haven - gold or greenbacks?
- Luke Kawa: Markets take a hit in anticipation of U.S. rate hike
- Why so much money is shorting the Canadian dollar
Quebecor posts loss
Despite cable television customer losses, Quebecor Inc. reported growth in its key telecommunications unit in the fourth quarter as it attracted more wireless subscribers than expected and the increase in average monthly spending grew.
The Quebec communications and media giant reported total revenue in the period of $989.4-million, falling short of average estimates of $1.09-billion, but the company said Wednesday it is no longer including its English-language Sun Media newspaper assets in its accounting as they are due to be sold to Postmedia Network Canada Inc.
Adjusted income increased 3.5 per cent to $50.3-million, or 41 cents per share, below analyst projections of 51 cents per share but up from 39 cents per share in the same quarter last year.
On an unadjusted basis, Quebecor posted a net loss of $59.5-million compared to a small profit in the same period last year. It attributed the decline largely to a $34.5-million non-cash decrease in goodwill related to the declining value of its broadcast and newspaper assets as those industries come under pressure.
The Gospel According to John
Here's a stat that so perfectly highlights gender inequality in the corporate world: The number of chief executive officers named John outnumber all women in S&P 1500 companies.
According to a recent study published in The New York Times, CEOs named John accounted for 5.3 per cent, followed by chiefs named David, at 4.5 per cent.
Those compare to just 4.1 per cent for all women, 3.9 per cent each for Robert and James, 3.8 per cent for Michael and 3.1 per cent for William.
The report, written by Justin Wolfers, a high-profile economics prof in the United States, looks at it another way, as well, via a "Glass Ceiling Index" that finds that "for each woman, there are four men named John, Robert, William or James."
This index, Mr. Wolfer writes, was "inspired" by an Ernst & Young study that showed gender diversity inching up only slowly on corporate boards of directors.
"Indeed, the proportion of women on boards has increased only 5 percentage points over the last 10 years," that Ernst & Young report says.
"Only 16 per cent of S&P 1500 board seats are held by women – less than the proportion of seats held by directors named John, Robert, James and Williams."
Another study, by the way, showed the United States and Canada well down a list for women on boards.
And separately today, Bloomberg reported that women account for just 1.5 per cent of board members in Japan, despite the efforts of Prime Minister Shinzo Abe to boost their representation.
All of these findings underscore the ongoing work of The Globe and Mail's Janet McFarland, who most recently reported that Canadian companies have been slow to announce their new board policies in the face of new rules on reporting gender diversity.
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- Janet McFarland: A slow unveiling of gender diversity plans in Canadian companies
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