Echelon Wealth Partner Blog

April Market Recap

Tue, 05 May 2026 19:41:19 GMT

Insights Into Market Performance for the Month of April, 2026

April 2026 ended with widespread gains across North American equities, bringing most major indices to near-record highs. The Nasdaq Composite led this movement, rising 15.29% for the month to finish at 24,892.31. The S&P 500 followed, advancing 10.42% to close at 7,209.01. In Canada, the S&P/TSX Composite gained 3.65% to settle at 33,964.33. The Dow Jones Industrial Average, however, increased by 7.14% to close at 49,652.14 but failed to surpass the highs it established in February.

A key factor in this market performance was the stability in monetary policy. Both the United States Federal Reserve and the Bank of Canada elected to hold their benchmark interest rates steady throughout the month. By pausing rate adjustments, central banks provided a predictable financial environment. This approach reduced immediate concerns regarding borrowing costs, allowing market participants to shift their focus toward corporate earnings and global events.

Attention also turned to earnings reports from major technology companies. Firms such as Apple, Meta, and Amazon delivered financial results that received a mixed reception from Wall Street. While these companies continue to allocate capital to artificial intelligence, investors are increasingly scrutinizing the near-term financial return on these expenditures. The market is assessing how AI integration will translate into tangible revenue growth and profitability, which led to varied stock performance among these large-cap companies.

International geopolitical tensions remained a factor for overall market sentiment. Specifically, the ongoing standoff in the Strait of Hormuz created uncertainty for global equities. As a primary maritime route for energy transportation, any disruption in this region poses a risk to crude oil supplies. This situation has kept energy markets sensitive and served as a reminder of the geopolitical risks within the current economic landscape, tempering some of the market's broader risk appetite.

April 2026 was a month of broad market gains mixed with underlying complexities. The general demand for equities was evident in the Russell 2000, an index tracking small-cap companies, which increased 12.16% to close at 2,799.90. Yet, alongside these index-level increases, a sense of caution remains. Given the Dow’s inability to push to new highs, the market's ongoing assessment of artificial intelligence investments, and geopolitical risks in the Middle East, investors are navigating an environment that requires a careful approach.

Disclaimer: This report has been curated with assistance from Google’s Gemini

Portfolio Strategy: February 23, 2026

Mon, 23 Feb 2026 16:29:31 GMT

Chicago Fed Activity Index Turns Positive in Janu ary

The Chicago Fed National Activity Index rose to +0.18 in January 2026 from -0.21 in December, marking its highest level since February 2025 and signaling a pickup in US economic activity at the start of the year.

Production-related indicators drove the improvement, contributing +0.19 compared with -0.03 previously, while employment indicators edged up to +0.01 from -0.11. The sales, orders, and inventories category remained slightly negative at -0.02, though improved from -0.04, and personal consumption and housing made a neutral contribution after subtracting -0.04 in December.

Source: Trading Economics.

Take Five: Nvidia earnings head for centre stage

Feb 20 (Reuters) - Nvidia's earnings report is this week's centrepiece for markets, flanked by important data and politics in Europe, where both politicians and central bankers are jostling for top jobs.

A U.S. Supreme Court ruling from late Friday striking down key parts of President Donald Trump's tariff plans will also add a dose of volatility to markets as investors and companies try to get a handle on what goods will be taxed, at which rates, and from which exporting countries.

Here's all you need to know about the week ahead in financial markets from Lewis Krauskopf in New York, Rae Wee in Singapore, and Marc Jones, Harry Robertson and Dhara Ranasinghe in London.

1/ NVIDIA'S MOMENT

Artificial intelligence bellwether Nvidia NVDA.O is set to post quarterly results as investors worry about returns on AI spending and industry disruptions caused by the emerging technology.

Wednesday's report from the semiconductor giant, the world's largest company by market capitalization, will be a major event for stock markets. Nvidia shares have soared following the launch of ChatGPT in late 2022. Still, shares of the company and other "Magnificent Seven" megacap stocks have stalled so far in 2026.

Investors will also focus in the coming week on earnings reports from software companies including Salesforce CRM.N and Intuit INTU.O . Software stocks have been hammered this year over concerns AI will lead to upheaval for the industry's business models.

2/ ANNIVERSARY ANGST

Tuesday marks the fourth anniversary of Russia's full-scale invasion of Ukraine , and though U.S. President Donald Trump's push for a ceasefire continues, getting one over the line remains devilishly difficult on all sorts of fronts.

Ukraine has faced sustained pressure to agree to a deal that could mean painful concessions, as Russian forces pound its power grid and slowly advance on the battlefield.

At the same time, the International Monetary Fund looks set to rubber-stamp extended support, meaning Kyiv's bonds are flying high.

As volatile oil prices show, markets are also grappling with the potential of U.S. military action against Iran amid the long-running dispute over Tehran's nuclear abilities. Defence stocks and gold have also been beneficiaries.

Add in this year's Greenland and Venezuela flashpoints and the tinderbox situations in Gaza, Africa and Taiwan, and analysts warn of an everything, everywhere, all at once era of geopolitical turmoil where one crisis rolls into the next..

3/ STILL RUNNING HOT

Australia's consumer price reading due on Wednesday will be closely watched by investors, who are betting the central bank will hike rates at least once more this year as the economy remains in rude health and inflation proves sticky.

The Reserve Bank of Australia earlier this month became the only G10 central bank outside Japan to tighten policy, as it struggles to bring inflation under control in a supply-constrained economy.

Any upside surprise in Wednesday's figures would further cement bets that policymakers could deliver another 25 basis-point hike in May 0#AUDIRPR , bringing the cash rate to 4.10%.

Elsewhere in Asia, Tokyo's inflation data is due on Friday, though it's unlikely to materially alter the Bank of Japan outlook.

Analysts say Japanese Prime Minister Sanae Takaichi's historic election win clears the path for further BOJ tightening, leaving markets pricing in two rate hikes by December. 0#JPYIRPR .

4/ KEIR PRESSURE?

British Prime Minister Keir Starmer faces a reckoning on Thursday, when a Manchester one-off by-election could deliver a fatal blow to his faltering leadership.

Investors will be watching closely. Some fear a more left-wing successor to Starmer could ramp up spending and borrowing, adding to the flood of government bonds hitting markets.

British gilts and the pound wobbled earlier this month as a crisis engulfed Starmer over what he knew of Peter Mandelson's links to paedophile Jeffrey Epstein when he appointed the former as U.S. ambassador.

Markets calmed when Starmer's cabinet backed him, and recent UK bond sales have seen record demand as investors have snaffled up the sky-high yields on offer.

Should Labour get walloped by Nigel Farage's Reform or the Greens in the seat of Gorton and Denton, Friday could be another volatile day for British markets and Westminster.

5/ MUCH ADO ABOUT NOTHING

An otherwise dull ECB outlook just got a bit of a spark following a Financial Times report that Christine Lagarde plans to leave her post as president early.

Lagarde told the Wall Street Journal she expects completing her mission as president of the ECB will take until the end of her term.

This all has traders focusing on succession at one of the world's most important central banks, at the same time as bracing for change at the Fed.

Lagarde leaving early, the FT says, is to give outgoing French leader Emmanuel Macron a say in picking her successor.

It's early days, and Friday's preliminary February German, French and Spanish inflation data will likely confirmsteady rates for the rest of 2026.

Still, a guessing game of who next leads the ECB is underway. And consider this: has central bank independence been compromised by politicians tempted to bend the rules to guarantee their pick of ECB chief?

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Portfolio Strategy: February 9, 2026

Mon, 09 Feb 2026 16:14:22 GMT

Take Five: Near, far, wherever markets are

LONDON, Feb 6 (Reuters) - The outcome of Japan's snap election, a heavy dose of key U.S. data, earnings season, and a slide in (some) tech shares suggest traders will have little downtime in the coming week.

Here is all you need to know about what's coming up in financial markets, by Rae Wee in Singapore, Lewis Krauskopf in New York and Karin Strohecker, Tommy Wilkes and Lucy Raitano in London.

1/ LANDSLIDE VICTORY

Japanese Prime Minister Sanae Takaichi's coalition swept to a historic election win over the weekend, paving the way for promised tax cuts and military spending aimed at countering China.

Investords reacted by sending Japanese stocks to all-time peaks on Monday while super-long bonds reversed early weakness, in an apparent vote of confidence in Takaichi's "responsible, proactive" fiscal policy.

The yen JPY= also held its ground, as the looming threat of a potential currency intervention left traders hesitant to push it lower.

While voters have given Takaichi a huge mandate to reflate the economy, investors say she has little room to run up deficits or pressure will be quickly back on bonds and the currency.

An early test will be how she handles a pledge to suspend Japan's 8% sales tax on food and how she plans to fund it.

2/ AI SPLITS INTO WINNERS AND LOSERS

Cisco Systems CSCO.O and Germany's Siemens Energy report earnings on Wednesday.

They've benefited from the AI boom in different ways, but now Barclays says that trade is "seeing extreme dispersion".

In other words, the market is sifting between the winners and losers with more conviction. The sensitivity to which companies are benefiting or suffering from AI disruption is evident in sliding software and data analytics stocks. They have plunged as traders honed in on the existential threat posed by increasingly powerful AI models.

AI enablers, companies contributing to the global AI data centre build-out, meanwhile, have fared better. But with the spectre of a bubble popping and markets near record highs, it would be wise to hold onto your hats.

3/ DELAYED DATA DUMP

A double dose of major U.S. economic reports should give investors a critical view of the economy, after the releases were delayed a little by the recently ended three-day government shutdown.

The January non-farm payrolls report, now due on Wednesday, is expected to show an increase of 70,000 jobs, according to a Reuters poll. The Federal Reserve pointed to signs of stabilisation in the labour market as it held rates steady last month, pausing its easing cycle.

Two days later, the January consumer price index, one of the most closely watched measures for assessing inflation trends, is set to be published.

The data comes as investors gauge the impact of newly nominated Fed chair Kevin Warsh, who could take charge in time for the Fed's June meeting. Markets currently price that meeting as the likely next time for a rate cut.

4/FROM MUNICH, WITH LOVE

The Munich Security Conference gets underway on Thursday. Now in its seventh decade, the annual gathering saw possibly its most consequential - and contentious — meeting in 2025 when a series of U.S. statements set the stage for a tectonic shift in the international order still underway today.

There is no shortage of hot geopolitical issues - from Iran to Ukraine and Greenland - while questions over the future role of NATO are looming large.

But the meeting looks to stretch beyond its usual scope: The European Central Bank is working on opening up access to euro liquidity to more countries - part of efforts to bolster the single currency's international role, sources told Reuters.

The announcement will likely come from ECB chief Christine Lagarde, who will open a roundtable on trade dependencies at the conference.

5/ EUROPEAN BANKS' TIME IN THE SUN OVER?

European banks have been among the best performing stocks in the past 12 months .SX7P with a more than 60% gain, aided by rising profitability, low loan defaults and a showering of shareholders with cash.

Britain's Barclays BARC.L and NatWest NWG.L and Italy's UniCredit CRDI.MI report 2025 earnings in coming days, following generally strong numbers already from Deutsche Bank DBKGn.DE and BNP Paribas BNPP.PA . The French lender and Lloyds LLOY.L also lifted their key profitability targets.

But analysts warn the good times cannot last, especially if European economies slow. Spain's BBVA BBVA.MC saw a 7% drop in its shares on Thursday after it set aside 19% more in cash for loan losses in the fourth quarter than a year earlier.

As well as financial prospects, investors are looking for signs that bosses have an appetite to spend more of their excess capital on deals - such as Santander's recently announced $12.2 billion acquisition of U.S. lender Webster Financial WBS.N.

China’s forex reserves grow more than expected in January

BEIJING, Feb 7 (Reuters) - China's foreign exchange reserves rose more than expected in January, official data showed on Saturday, as the dollar declined.

The country's foreign exchange reserves, the world's largest, rose to $3.399 trillion last month, exceeding the $3.372 trillion forecast in a Reuters poll. The reserves totalled $3.358 trillion in December.

The yuan CNY=CFXS rose 0.45% against the dollar last month, while the dollar softened 1.15% against a basket of major currencies =USD .

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Portfolio Strategy: January 9, 2026

Fri, 09 Jan 2026 18:28:06 GMT

US Consumer Sentiment Rises Slightly in January

The University of Michigan’s consumer sentiment index inched up for the second consecutive month, rising to 54.0 in January 2026, its highest level since September 2025 and slightly above market expectations of 53.5, according to a preliminary estimate.

Gains were concentrated among lower-income consumers, while sentiment among higher-income households slipped. Overall, US households reported modest improvement in economic perceptions over the past two months, but sentiment remains nearly 25% below January 2025 levels. Consumers continue to worry about high prices and a softening labor market, though concerns about tariffs appear to be gradually easing. Year-ahead inflation expectations held steady at 4.2%, the lowest since January 2025, yet still well above the 3.3% recorded a year ago. Meanwhile, long-term inflation expectations ticked up slightly, rising to 3.4% from 3.2% in December.

Source: Trading economics

US job growth slows in December; unemployment rate eases to 4.4%

WASHINGTON, Jan 9 (Reuters) - U.S. job growth slowed more than expected in December amid business caution about hiring because of import tariffs and rising artificial intelligence investment, but the unemployment rate dipped to 4.4%, supporting expectations the Federal Reserve would leave interest rates unchanged this month.

Nonfarm payrolls increased by 50,000 jobs last month after rising by a downwardly revised 56,000 in November, the Labor Department's Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast 60,000 jobs added after a previously reported 64,000 increase in November.

The closely watched employment report suggested the labor market remained stuck in what economists and policymakers have called a "no hire, no fire" mode. It also confirmed the economy was in a jobless expansion. Economic growth and worker productivity surged in the third quarter, in part attributed to the AI spending boom.

The labor market lost considerable momentum last year, largely blamed on President Donald Trump's aggressive trade and immigration policies, which economists and policymakers said reduced both demand for and supply of workers.

The sharp moderation in job growth, however, started in 2024. The BLS has estimated about 911,000 fewer jobs were created in the 12 months through March 2025 than previously reported. The agency will publish its payrolls benchmark revision next month with the January employment report.

The overcounting has been blamed on the birth-death model, which is used by the BLS to estimate how many jobs were gained or lost because of companies opening or closing in a given month. Last month, the BLS said it would, starting in January, change the birth-death model by incorporating current sample information each month.

Together with the December employment report, the BLS published annual revisions to the household survey data for the past five years. The unemployment rate is calculated from the household survey.

The annual population control adjustments, normally incorporated with the January employment report, will be delayed. November's unemployment rate was revised down to 4.5% from the previously reported 4.6%.

The median forecast in a Reuters poll of economists was for the jobless rate to have eased to 4.5% in December. Some economists say low supply has prevented a sharp rise in the unemployment rate. They estimated that between 50,000 and 120,000 jobs need to be created each month to keep up with growth in the working-age population.

The U.S. central bank cut its benchmark interest rate by a quarter of a percentage point to the 3.50%-3.75% range in December, but officials indicated they were likely to pause further reductions in borrowing costs for now to get a better sense of the economy's direction.

With factors like tariffs and AI preventing companies from hiring more workers, economists increasingly view the labor market's challenges as more structural than cyclical, which would make rate cuts less effective to stimulate job growth.

Canada job creation pauses after hiring surge, unemployment rate rises

OTTAWA, Jan 9 (Reuters) - Canada created just 8,200 net new jobs in December after three months of outsize gains and the unemployment rate rose to 6.8% from 6.5% as more people searched for work, Statistics Canada said on Friday.

Analysts polled by Reuters had expected a net loss of 5,000 positions and the jobless rate to edge up to 6.6%.

The Canadian dollar dipped to C$1.3880 to the U.S. dollar, or 72.05 U.S. cents, from C$1.3873, or 72.08 cents.

The economy had added a total of 181,000 new jobs from September through November, in contrast to almost no change in the first eight months when U.S. tariffs and trade uncertainty choked hiring.

There were 1.55 million people unemployed in December, an increase of 72,900, or 4.9%, from November.

"With more people once again looking for work, today's unemployment rate suggests that plenty of slack remains in the labor market," said Andrew Grantham, a senior economist at CIBC Capital Markets.

Full-time employment rose by 50,200 in December while part-time employment fell by 42,000.

Employment in health care and social assistance in December increased by 20,800 while the professional, scientific and technical services sector posted a drop of 18,100 positions, the first decrease since August.

People aged from 15 to 24 have been hard hit by the economic uncertainty. After posting successive gains in October and November, the first advances since the start of the year, youth employment dipped by 1.0%. The average hourly wage of permanent employees - a gauge closely tracked by the Bank of Canada to ascertain inflationary trends - rose by 3.7%, down from 4.0% in November.

The Bank held its key policy rate steady at 2.25% on December 10 and said this was about the right level to keep inflation close to the 2% target. Money markets expect rates to stay on hold for the rest of the year.

"While hiring was soft and the unemployment rate rose, the survey wasn't weak enough to alter expectations for the Bank of Canada," Desjardins macro strategy head Royce Mendes said in a note.

US single-family housing starts rebound in October, building permits dip

WASHINGTON, Jan 9 (Reuters) - U.S. single-family homebuilding rebounded in October, but permits for future construction eased, signaling caution among builders as new housing inventory remains high and demand soft.

Single-family housing starts, which account for the bulk of homebuilding, increased 5.4% to a seasonally adjusted annual rate of 874,000 units in October, the Commerce Department's Census Bureau said on Friday. Starts dropped to a pace of 829,000 units in September from a 869,000-unit pace in August.

The reports were delayed by the 43-day government shutdown. Builders are also being constrained by higher building and labor costs because of import tariffs and an immigration crackdown.

Permits for future single-family homebuilding fell 0.5% to a rate of 876,000 units in October. They increased to a pace of 880,000 units in September from a 858,000-unit rate in August.

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Market Volatility

Tue, 03 Sep 2024 17:28:37 GMT

Advisors are telling their clients:

“I want to remind you that your portfolio has been built using prudent asset allocation principles, and is designed to minimize risk during volatile times.

In light of what we discussed today, I’m recommending that we stay the course, in order to be there for the opportunity to grow your wealth and to prepare you

for retirement.”

But if we get a 20% correction from here and you do nothing the above advice seems like the wrong thing to do. I think investor's should continue to hold cash/raise cash and ride out the next month on the sidelines.

Canada April producer prices up 1.6% vs March on lumber

Fri, 05 Apr 2024 16:28:00 GMT

Submitted by Victoria, BC Financial Planning | Financial Planning V8W 2B on May 31st, 2021

Canada April producer prices up 1.6% vs March on lumber - Reuters News

May 31 (Reuters) - Producer prices in Canada rose by 1.6% in April from March on higher prices for lumber and other wood products, Statistics Canada said on Monday. The annual increase in softwood lumber prices was the largest increase on record since the series began in 1957.

The increase followed an upwardly revised 1.8% increase in March. Raw materials prices were up 1.0% in April, and were up 56.4% on the year.

INDUSTRIAL PRODUCT PRICES (pct change)

Month-on-month Year-on-year

April Mar(rev) Mar(prev) April Mar(rev) Mar(prev)

total +1.6 +1.8 +1.6 +14.3 +10.3 +10.0

ex energy/petrol +1.8 +1.5 +1.3 +10.3 +8.4 +8.1

RAW MATERIALS PRICE INDEX (pct change)

Month-on-month Year-on-year

April Mar(rev) Mar(prev) April Mar(rev) Mar(prev)

total +1.0 +2.2 +2.3 +56.4 +34.7 +34.7

ex crude energy +3.4 +0.5 +0.5 +21.9 +16.1 +16.0

NOTE: A flash estimate by Statscan released on May 13 had pointed toward a 1.7% increase in April from March.

Canada posts first current account surplus since 2008 in first quarter - Reuters News

May 31 (Reuters) - Canada's current account balance was a surplus of C$1.18 billion ($977.47 million) in the first quarter, from a revised C$5.27 billion deficit in the fourth quarter of 2020, on a higher trade in goods and services, Statistics Canada said on Monday. This was the first surplus since the third quarter of 2008.

Seasonally adjusted figures in billions of Canadian dollars:

Q1 2021 Q4(Rev) Q4(Prev) Q1 2020

Current Account +1.184 -5.274 -7.261 -0.619

Goods +1.684 -9.266 -9.490 -1.009

Services +0.458 +0.407 +0.285 +0.075

Investment Income +0.979 +5.916 +4.171 +0.453

NOTE: Analysts had on average forecast a current account surplus of C$3.4 billion for the first quarter of 2021. Figures are seasonally adjusted.

China's factory activity grows at slightly slower pace as raw materials costs surge - Reuters

Manufacturing PMI slips to 51.0 in May from 51.1 in April

Services PMI rises to 55.2 in May from 54.9 in April

Raw materials costs grow at fastest pace since 2010

BEIJING, May 31 (Reuters) - China's factory activity growth slowed slightly in May as raw materials costs grew at their fastest pace in over a decade, weighing on the output of small and export-oriented firms.

The official manufacturing Purchasing Managers' Index (PMI) inched lower to 51.0 in May, against analyst expectations that it would remain unchanged from April at 51.1, data from the National Bureau of Statistics (NBS) showed on Monday.

The official PMI, which largely focuses on big and state-owned firms, has stood above the 50-point mark that separates growth from contraction for over a year.

While the Chinese economy has largely shaken off the gloom from the COVID-19 pandemic, officials warn the foundations for the recovery are not yet secure amid problems like higher raw material costs and the pandemic situation overseas.

Iris Pang, chief economist for Greater China at ING, said in a note that "external demand will likely remain flat" as economic recoveries in the United States and parts of Europe are likely to be "offset by increasing Covid cases in ASEAN, which is the biggest trade partner of China."

Some emerging COVID-19 cases in China's Guangdong province, where most electronic factories are located, continued semiconductor chip shortages and high commodity prices are also among the challenges facing producers, she added. ( Full Story )

A sub-index for new export orders stood at 48.3 in May, down from 50.4 in the previous month and slipping sharply into contraction.

A sub-index for raw material costs in the official PMI stood at 72.8 in May, up from April's 66.9 and hitting the highest level since 2010.

Prices for commodities such as coal, steel, iron ore and copper have surged this year, fuelled by post-lockdown recoveries in demand and easing liquidity globally.

China's policymakers have repeatedly expressed concern about rising commodity prices in recent weeks and called for stricter management of supply and demand and to crack down on "malicious speculation." ( Full Story ) ( Full Story ) ( Full Story )

"We expect commodity prices to stabilize in the coming months," said Louis Kuijs, head of Asia economics at Oxford Economics.

Tougher oversight on spot and futures markets and increased global commodity supply in the second half of 2021 should help reduce cost pressures on China's firms, he said.

In addition to surging raw material prices, Chinese factories are struggling with high shipping costs and an appreciating Chinese currency. Some are able to pass on the higher costs to overseas customers, while some small firms are stopping taking orders to avoid losses. ( Full Story ) ( Full Story )

A sub-index for the activity of small firms stood at 48.8 in May, sharply down from April's 50.8.

Firms continued to lay off workers and at faster pace, the official data also showed.

In the services sector, activity expanded for the 15th straight month, and at a faster pace, with the non-manufacturing PMI index rising to 55.2 from 54.9 the month before.

China posted a record 18.3% growth in the first quarter, but analysts expect the brisk expansion to moderate later this year. ( Full Story )

Policymakers have pledged to support job-creating small firms that were hit harder by the coronavirus pandemic. The central bank is trying to cool credit growth to help contain debt risks, but is treading warily to avoid hurting the economic recovery.

"The mixed data strengthens our case for policy stability in the near term, especially before the CCP's centenary celebration in July," said analysts at Citi in a note, referring to the ruling Communist Party.

German inflation pushes further above ECB target in May - Reuters News

HICP accelerates to 2.4% from 2.1% in April

ECB targets inflation close to but below 2%

ECB has pushed back against predictions of new inflation era

BERLIN, May 31 (Reuters) - Germany's annual consumer price inflation accelerated in May, advancing further above the European Central Bank's target of close to but below 2%, the Federal Statistics Office said on Monday.

Consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 2.4% in May, up from 2.1% in April. A Reuters forecast had pointed to a May reading of 2.5%.

The ECB's chief economist, Philip Lane, said earlier this month the bank had a "lot of work to do" to raise inflation back to its 2% goal and market talk of rapidly rising prices is misplaced.

Euro zone inflation is approaching 2%, its fastest rate in years, on the back of fiscal support and the unwinding of last year's oil price crash, prompting some commentators to predict a new era of inflation.

But Lane pushed back on this narrative, arguing that the labour market will take years to get back to its pre-crisis level, corporate balance sheets are depleted and the economic rebound is still predicated on copious central bank and government support. ( Full Story )

The ECB will next meet on June 10 and must decide whether to ease up on its stimulus given the prospect of rapid growth over the rest of the year as economic restrictions are lifted and the services sector rebounds.

"The ECB is unlikely to be disturbed by the short-term fluctuations in the inflation rate and will only slowly return its policy to normal," Holger Schmieding, chief economist at Berenberg Bank, said.

4 Tips for Minimizing Financial Anxiety

Wed, 21 Dec 2022 17:33:00 GMT

Submitted by Victoria, BC Financial Planning | Financial Planning V8W 2B on December 21st, 2022

If you’ve woken up in the middle of the night to a money-related panic attack, you’re not alone. Our financial situation dictates so many parts of our everyday life. That said, excessive stress is a concern that should be addressed.

Money-driven anxiety is a growing concern in this uncertain economy. Ignoring your finances entirely isn’t the solution, nor is excessively fretting over every aspect of your finances. So what can you do to ease the burden of financial anxiety?

Avoid the Comparison Trap

People tend to post the best version of themselves on social media. Try not to let this facade of vacations, dining out, and luxury items fool you into thinking that’s how everyone lives. Trying to keep up will likely only get you so far. Avoid stretching yourself to present a skewed image of your lifestyle to others.

There’s also a private element beyond these posts that goes unmentioned. We don’t see the time or commitment some people put into their careers. Some people, like influencers, may receive gifts from companies and may not be spending their own money on the trips/clothes/etc. they’re posting. There could also be plenty of debt as a result of maintaining this supposedly ideal lifestyle.

Instead of getting caught in comparison, try to focus on what you need to be happy. Understand what you need, create your own goals, and measure your progress against your past self.

Start an Emergency Fund

It’s common for financial stress to stem from picturing the worst-case scenario.

“If I lose my job, how will I pay my bills?”

“What if a family member gets sick or injured?”

“Can I afford to fix my car if I get in an accident?”

While being aware of the worst possible situation can be constructive, fixating on it can be unhealthy. By preparing an emergency fund, you may reduce stress during unforeseen circumstances. Try tying this fund to your monthly budget to start building on something to lean on when something pops up.

Try Spending Socially, Not Materialistically

We accumulate possessions, they become old, we want something new, and the cycle continues.

According to research from the McCombs School of Business at the University of Texas at Austin, participants were happier when they spent money on experiences versus material possessions in every category, regardless of how much the item cost. ¹

Try spending money on an experience with the people you love. Our closest relationships are often what ultimately make us happy.

Continue to Educate Yourself

Financial professionals can review your entire financial picture or provide guidance in a specific area of concern. They can be great resources, and some even offer no-obligation initial meetings to discuss the basics of your financial plan, a good first step towards lessening the load of anxiety.

You can also do your own research, but be mindful of biases, conflicts of interest, and the sources that resources use. Ultimately, it’s your money, and you may feel more comfortable when you understand where you are financially, and what you can do to pursue your goals.

^1. ^{https://news.utexas.edu/2020/03/09/spending-on-experiences-versus-possessions-advances-more-immediate-happiness/}

This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.

Canadian Dollar Gives Back 2021 Gains as Risk Appetite Crumbles

Tue, 19 Jul 2022 17:56:00 GMT

Submitted by Victoria, BC Financial Planning | Financial Planning V8W 2B on July 19th, 2021

Canadian dollar weakens 1.1% against the greenback
Loonie touches its weakest level since Feb. 5 at 1.2807
Price of U.S. oil falls 3.5%
Canadian 10-year yield touches its lowest level since Feb. 19

TORONTO, July 19 (Reuters) - The Canadian dollar weakened to a five-month low against its U.S. counterpart on Monday as a worldwide surge in coronavirus cases weighed on investor sentiment, with the currency shifting into negative territory since the start of the year.

The safe-haven U.S. dollar rallied and stocks globally were facing their longest losing streak since the pandemic first hit global markets 18 months ago, as the continued spread of the highly-contagious Delta variant raised doubts about the strength of economic recovery. ( Full Story ) ( Full Story )

Canada is a major producer of commodities, including oil, so the loonie is sensitive to global economic prospects.

U.S. crude oil futures CLc1 fell 3.5% to $69.27 a barrel after OPEC+ overcame internal divisions and agreed to boost output, sparking concerns about a crude surplus. ( Full Story )

The Canadian dollar CAD= was trading 1.1% lower at 1.2749 to the greenback, or 78.44 U.S. cents, its biggest decline in nearly five months. It touched its weakest intraday level since Feb. 5 at 1.2807.

The currency has slumped 5.9% since notching in June a six-year high near 1.20, while it is down 0.1% since the start of 2021.

Speculators have cut their bullish bets on the Canadian dollar to the lowest level in ten weeks, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of July 13, net long positions had fallen to 26,376 contracts from 41,178 in the prior week.

Canadian government bond yields were lower across a flatter curve, tracking the move in U.S. Treasuries. The 10-year CA10YT=RR touched its lowest level since Feb. 19 at 1.170% before recovering slightly to 1.176%, down 6.5 basis points on the day.

Oil falls more than $2 after OPEC+ producers agree to raise output - Reuters News

By Noah Browning

LONDON, July 19 (Reuters) - Oil prices fell sharply on Monday after OPEC+ overcame internal divisions and agreed to boost output, sparking concerns about a crude surplus as COVID-19 infections rise in many countries.

Brent crude LCOc1 was down $2.54, or 3.4%, at $71.05 a barrel by 1235 GMT. U.S. oil CLc1 was down $2.64, or 3.6%, at $69.17 a barrel. Both benchmarks recorded their largest declines since early April.

OPEC+ ministers agreed on Sunday to increase oil supply from August to cool prices that this month hit their highest level in more than two years as the global economy recovers from the COVID-19 pandemic.

The group of members of the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia also agreed new production shares from May 2022. ( Full Story )

"Longer-term, free and additional production capacities from OPEC+ countries are the key reason why we see oil moving lower again," said Julius Baer analyst Carsten Menke.

"We remain confident that the oil market is in the final phase of its upcycle."

Goldman Sachs, however, said it remained bullish on the outlook for oil and the agreement was in line with its view that producers "should focus on maintaining a tight physical market all the while guiding for higher future capacity and disincentivising competing investments."

But PVM Oil analyst Tamas Varga sounded a note of caution on the pace of the expected recovery of demand from the pandemic.

"The global COVID situation is turning dire again and it understandably makes investors wary although it must be stressed that restrictions are being eased in other parts of the world."

https://fingfx.thomsonreuters.com/gfx/ce/qzjvqxxwbpx/BrentCurveJuly19vsJuly62021.png

OPEC+ last year cut output by a record 10 million barrels per day (bpd) as the pandemic hollowed out demand, prompting a collapse in prices with U.S. oil futures prices at one point falling into negative territory.

OPEC+ producers have gradually eased their output curbs, which now stand at around 5.8 million bpd.

To overcome internal divisions, OPEC+ agreed new production quotas for several members from May 2022, including the UAE, Saudi Arabia, Russia, Kuwait and Iraq.

UK shopper numbers up 0.9% last week on weather boost - Reuters News

LONDON, July 19 (Reuters) - Shopper numbers across Britain rose 0.9% in the week to July 17 compared with the previous week, boosted by the return of sunny weather, researcher Springboard said on Monday.

It said the overall increase in shopper numbers, or footfall, was driven by a 3.3% rise in high street shopper traffic, which more than offset declines of 0.8% and 2.2% in retail parks and shopping centres respectively.

"There was a glimmer of hope for the hospitality industry, as the most gains in footfall were made post 5 p.m. as shoppers took the opportunity provided by hot weather to enjoy hospitality venues," said Diane Wehrle, Springboard's insights director.

High street footfall post 5 p.m. rose by 9.8% from the week before compared with 1.9% up to 5 p.m.

Springboard said overall UK footfall was down 24.9% compared with the same week in 2019, before the pandemic started to disrupt traffic.

The pandemic has hammered Britain's retailers, already struggling with high rents and business taxes, tight margins and online competition. Hundreds of store closures and thousands of job losses have been announced.

Springboard forecast that shopper numbers will rise by nearly one fifth this week versus the previous week thanks to the lifting of most remaining COVID-19 restrictions in England on Monday.

Market Update as of April 30, 2022

Fri, 13 May 2022 15:34:00 GMT

Submitted by Victoria, BC Financial Planning | Financial Planning V8W 2B on May 13th, 2022

In the markets:

U.S. Markets: The major U.S. market indexes endured a fourth consecutive week of losses as fears of slowing growth were compounded by disappointing earnings from some market heavyweights like Amazon. The benchmark S&P 500 index fell further into correction territory, now down about 14% from its recent peak, while the technology-heavy Nasdaq Composite and small-cap Russell 2000 Index fell further into their respective bear markets, down roughly 24% from their highs. For the week, the Dow Jones Industrial Average shed 834 points, closing at 32,977, a decline of -2.5%. The Nasdaq Composite declined -3.9% finishing the week at 12,335. By market cap, the large cap S&P 500 gave up ‑3.3%, while the mid-cap S&P 400 fell -3.2%. The small-cap Russell 2000 closed down -3.9%.

International Markets: Most of the major international markets finished the week to the downside as well. Canada’s TSX fell -2.0%, while the United Kingdom’s FTSE 100 rose 0.3%. France’s CAC 40 and Germany’s DAX pulled back -0.7% and -0.3%, respectively. In Asia, China’s Shanghai Composite retreated -1.3%. Japan’s Nikkei declined ‑0.9%. As grouped by Morgan Stanley Capital International, emerging markets ended the week flat. Developed markets ended down -0.9%.

Commodities: Precious metals failed to serve as a safe haven given the weakness in the financial markets. Gold pulled back -1.2% to $1911.70, while Silver gave up -4.8% to $23.09. Energy managed to buck the trend with West Texas Intermediate crude oil rising 2.6% to $104.69 per barrel, while Brent crude oil gained 0.9% to $106.67. The industrial metal copper, viewed by some analysts as a barometer of global economic health due to its wide variety of uses, ended the week down -3.8%.

April Summary: April was a difficult month for the markets everywhere. In the U.S., the Dow Jones Industrial Average finished the month down -4.9%, while the Nasdaq plunged -13.3%--its biggest monthly decline since October 2008. Large caps shed -8.8%, while mid-caps declined -7.2% and small caps fell -10.0%. For the month, Canada declined -5.2%, while the UK rose 0.4%. France and Germany ended down -1.9% and -2.2%, respectively, while in Asia fell -6.3%. Japan declined -3.5%. Emerging markets finished the month down -6.1%. Developed markets gave up ‑6.7%. Gold and Silver pulled back -0.3% and -6.7%, respectively. Oil finished the month up 0.4%. Copper finished April down -6.8%.

U.S. Economic News: The U.S. labor market remains extremely robust as initial claims for unemployment benefits fell again last week. The Labor Department reported claims fell by 5,000 to just 180,000 last week. The decline was in line with economists’ forecasts. Claims remain near multi-decade lows at levels not seen since the early 1970’s. Meanwhile, the number of people already collecting benefits, known as ‘continuing claims’, fell by 1,000 to 1.41 million. That number is also at its lowest level since the early 1970’s. Stuart Hoffman, senior economic advisor at PNC Financial Services Group noted that the labor market remains in “excellent shape”. Economists note that any increase in claims would be a leading indicator of a slowing economy—but there are no signs of that happening now.

The spring housing market is off to an unpredictable start amid rising mortgage rates, according to the National Association of Realtors (NAR). The NAR reported pending home sales, which counts the number of transactions in which a contract has been signed but not yet closed, dropped 1.2% in March. This was the fifth consecutive month in which contract signings declined. Pending sales dropped the most in the Midwest—down 6.1%. Contract signings also fell in the South and the West. Signings rose 4% in the Northeast, but every region saw a decline in pending sales compared to the same time last year. Lawrence Yun, chief economist for the NAR stated, “The falling contract signings are implying that multiple offers will soon dissipate and be replaced by much calmer and normalized market conditions.” Yun added that rising mortgage rates have already begun to reduce the pool of eligible homebuyers. Yun said he now predicts existing-home sales will decrease 9% in 2022.

Home prices continued their historic rise in February as rising mortgage interest rates have not yet (thru February) slowed the blistering pace of house appreciation. The S&P CoreLogic Case-Shiller 20-city home prices index posted a huge 20.2% year-over-year gain in February—up markedly from 18.9% the prior month. On a monthly basis, the index increased 2.4% between January and February. Similarly, on a national level the Case-Shiller home price index increased 19.8% over the past year. This represented the third-largest pace of home-price appreciation in the report’s history. As in previous months, Phoenix led the way with the highest rate of home price growth—up an annual 32.9% over the past year. Two Florida cities closely followed, Tampa with a 32.6% gain and Miami with a 29.7% rise. Selma Hepp, deputy chief economist at CoreLogic noted rising mortgage rates will undoubtedly cool the housing market sooner rather than later. Hepp wrote in a note to clients, “With diminished buying power and mortgage rates pushing above 5% in recent weeks, home-price growth is likely to take a step back in coming months.”

The Federal Reserve’s ‘preferred’ measure of inflation rose a sharp 0.9% in March, but the increase stemmed largely from a surge in the cost of gas. Over the past 12 months, the Personal Consumption Expenditures Index (PCE) has risen 6.6%, up 0.2% from February. That’s the steepest rise since 1981. Yet the narrower measure of inflation that strips out the food and energy categories, known as core PCE, rose at an annualized 5.2%. That number matched forecasts. The Fed views the PCE index--the core rate in particular--as the most accurate measure of U.S. inflation. It’s more comprehensive and takes into account when consumers substitute cheaper goods for more expensive ones--say ground beef for steak or frozen spinach for fresh.

Confidence of the nation’s consumers slipped this month but remained robust. The Conference Board reported its survey of consumer confidence pulled back -0.3 point to 107.3. Economists had been expecting a reading of 108.5. Consumer confidence had declined early in the year following the Omicron outbreak and later the war in Ukraine. Soaring inflation and higher gasoline prices have also weighed on sentiment. Still, economists state that the chance of a recession appears low—at least for now. The measure of how consumers feel about the economy right now slid to 152.6 from an eight-month high of 153.8 in March. A similar gauge that measures sentiment for the next six months rose to 77.2 from 76.7 indicating cautious optimism about the future. Mahir Rasheed, U.S. economist at Oxford Economics stated, “Confidence has held up relatively well in the face of elevated geopolitical disruptions and the fiery pace of price increases in recent months.”

Orders for goods expected to last at least three years rebounded in March signaling the economy continued to grow at a steady pace. The government reported orders at U.S. factories for long-lasting goods such as cars rose 0.8% last month—its sixth advance in the last seven months. Furthermore, the initially reported -2.2% decline in February was revised to show a lesser -1.7% drop. The increase matched the estimate of economists polled by the Wall Street Journal. Another measure of factory conditions, known as core orders, advanced 1% in the month. The core number strips out transportation and military equipment and gives a better sense of underlying demand in the U.S. economy. Many analysts expect the strength in manufacturing to continue—despite rising interest rates. Senior economist Jennifer Lee of BMO Capital Markets noted, “The solid increase in core orders suggests that businesses remain in good shape, and are still looking to bulk up its machines and equipment to contribute to their bottom lines.”

The U.S. economy contracted an annualized 1.4% in the first quarter, marking its first drop since the onset of the pandemic. However, analysts were quick to point out that the decline stemmed predominantly from a record trade deficit. Consumer spending and business investment remained robust. The trade deficit by itself reduced GDP by a whopping 3.2 percentage points, the third highest number on record. Lower government spending and a decline in inventory stockpiles also contributed to the weak GDP number. However, some analysts were quick to point out that the reading didn’t mean a recession was imminent. Chief economist Ian Shepherdson at Pantheon Macroeconomics stated, “This is noise, not signal. The economy is not falling into recession.”

International Economic News: Bank of Canada Governor Tiff Macklem acknowledged he and his staff had misjudged the strength of inflation at the beginning of the year, and pledged to act “as forcefully as needed” to make up for the mistake. “(We’re coming) out of the deepest recession we’ve ever had,” Macklem said during testimony at the Senate banking committee this week. “We got a lot of things right. We got some things wrong, and we are adjusting.” Macklem was referring to the Bank of Canada’s decision not to raise interest rates, despite hard evidence of the emergence of the fastest inflation in decades. Macklem held steady, leaving the benchmark rate at an emergency setting of 0.25%. Macklem suggested that another half-point hike could be in the cards, though anything larger than that would be “very unusual.”

Across the Atlantic, independent research consultancy Capital Economics said the Bank of England will meet market expectations and hike interest rates to 3.0% by 2023. The forecast put them well ahead of the institutional analyst community which sees the rate topping out at 2.0%. OIS data meanwhile shows investors to be anticipating Bank Rate to peak around 2.5% in 2023. Paul Dales, Chief UK Economist at Capital Economics wrote, “Even though jobs growth will slow, we think the labour market will remain tighter for longer and that wage growth will be higher.” Dales attributed the tight labor market to Brexit and the aftermath of the pandemic.

On Europe’s mainland, the incumbent French President Emmanuel Macron beat his right-wing rival Marine Le Pen in France’s presidential election. The win makes him the first French president in two decades to win a second term. Voter turnout was 2% lower than the 2017 election the Interior Ministry reported. Le Pen said her result was a “victory” for her political movement and pointed to parliamentary elections which take place in June. “The French showed this evening a desire for a strong counterweight against Emmanuel Macron, for an opposition that will continue to defend and protect them,” she said.

The German government forecast the country’s economy will grow by only 2.2% this year, as Russia’s war on Ukraine weighs on prospects. The Economy Ministry cut the outlook from the 3.6% growth it had forecast in January. Economy Minister Robert Habeck said the government was making a “conservative" estimate, pointing to still-fragile supply chains, the effect of sanctions against Russia on the availability of raw materials and the ongoing effects of the coronavirus pandemic. The 2.2% growth prediction assumes no energy embargo or blockade of gas deliveries, Habeck said. “If this came on top, we would have a recession in Germany," he added. Russian imports account for a significant, though declining, proportion of Germany's gas supplies. Habeck said that proportion has declined from 55% before the war to 35% now.

In Asia, Chinese President Xi Jinping has pledged to ramp up support for the economy as lockdowns from a COVID outbreak and the war in Ukraine threaten growth. China will roll out a package of measures to help industries and small firms affected by the pandemic, state media said. “The COVID-19 and Ukraine crisis have led to increased risks and challenges. The complexity, severity and uncertainty of China’s economic development environment have increased,” the Politburo was quoted as saying. “Stabilizing growth, employment and prices are facing new challenges. It is very important to do a good job in economic work and effectively protect and improve people’s livelihood.” Carlos Casanova, senior economist for Asia at UBP in Hong Kong expects China’s economy to get worse before it gets better. Casanova wrote in a note, “We expect that the economy will contract in the months March-April before stabilizing in June.”

Japan’s currency, the yen, hit a new 20-year low after the Bank of Japan reinforced its low-rate policy. As almost every other major central bank has begun monetary tightening, rate increases, or both, Japan has bucked the trend. Bank of Japan Governor Kuroda said at a news conference, “The Japanese economy is still on the road to recovery from the impact of the Covid-19 pandemic. It is most important to support economic recovery by patiently continuing monetary easing.” Mr. Kuroda’s comments accelerated a fall in the yen. The yen briefly weakened to 131 against the dollar, a 20-year low. That means the yen has lost more than 10% of its value in less than two months.

Finally: The largest city in China, Shanghai, remains in full lockdown as authorities try to contain yet another wave of COVID-19. Those lockdowns have led to a major backlog of cargo and container ships around the Port of Shanghai—the busiest container port in the world. Last year, over 47 million 20-foot equivalent units (unit of measure for container sizes) were handled there. For perspective, the largest container port in Europe, Rotterdam, had only 15.3 million TEUs. U.S. trucking giant JB Hunt expects the delays that Shanghai is experiencing to spread to the US West Coast by July. Shelley Simpson, chief commercial officer stated, “We do forecast that [shipping delays] to get a lot worse as we come into the summer months.” (Chart by statista.com)

Dollar steadies amid pandemic concerns, inflation in focus

website@sitemodify.com (Website Editor) — Mon, 12 Jul 2021 13:43:00 GMT

Submitted by Victoria, BC Financial Planning | Financial Planning V8W 2B on July 12th, 2021

By Julien Ponthus

LONDON, July 12 (Reuters) - The safe haven dollar ticked up against most currencies on Monday as concerns about the pandemic made investors cautious, while they also awaited more clues about the global economic recovery before making their next moves.

With markets hyper-sensitive to any talk of early tapering, U.S. inflation data on Tuesday will be closely watched ahead of testimony by Federal Reserve Chair Jerome Powell on Wednesday and Thursday.

Meanwhile, the People's Bank of China's surprise policy easing on Friday, meant to boost the post-COVID economic recovery, failed to provide lasting momentum. ( Full Story )

"While welcome, the move also signals that the authorities are concerned about China’s growth prospects, so it's mixed news," said Marshall Gittler, head of investment research at BDSwiss Holding.

The yuan was just slightly lower at 6.4750 per dollar CNY=CFXS after Chinese shares and bonds rose. CNY/ .SS

Economists polled by Reuters expect U.S. consumer prices for June to have risen 0.4% from May, and 4.0% from a year earlier, after two straight months of sharp gains.

Any signs that inflation could be more persistent than previously thought could fan expectations the Fed may exit from current pandemic-era stimulus earlier, supporting the dollar against other major currencies.

Conversely, more benign data could lead investors to think the U.S. central bank can afford to maintain an easy policy framework for longer, encouraging more bets on risk assets, including risk-sensitive currencies.

At 1108 GMT, the dollar =USD was up 0.22% against a basket of currencies while the euro EUR=EBS lost 0.26% at $1.1848 against the greenback.

Sterling fell 0.36% to $1.3860 while British Prime Minister Boris Johnson is expected to confirm plans to remove nearly all remaining COVID-19 restrictions in England from July 19, despite a surge of cases to levels unseen for months.

"In the UK there is optimism about the strength of the rebound, that with the further lifting of restrictions we will see additional demand emerging," said Colin Asher, senior economist at Mizuho in London.

"There are expectations the Bank of England may be one of the major banks to hike interest rates next year."

Although few investors expect the global economic recovery to be derailed by fresh waves of COVID-19 infections, vulnerable currencies such as the tourism-exposed Thai baht have taken a hit.

The baht THB=TH was trading above Friday's low but has lost about 5% against the dollar in a month, and on Monday Thailand's central bank warned the economy may miss its projections as virus curbs hit growth. EMRG/FRX

Elsewhere in emerging markets, the rand ZAR= sank more than 2% to a low of 14.4968 to the dollar as violence broke out after the jailing of former South African President Jacob Zuma, resulting in property damage and road closures. ( Full Story )

Japan's safe-haven yen stood at 110.18 yen per dollar JPY= , off Thursday's one-month high of 109.535.

Cryptocurrencies were on the defensives with bitcoin down about 1.5% at $33,760 BTC=BTSP and ether ETH=BTSP down 1.2% at $2,113.

Yields hold above five-month lows before auctions - Reuters News

By Karen Brettell

NEW YORK, July 12 (Reuters) - U.S. Treasury yields eased on Monday but held above five-month lows reached last week ahead of a Treasury sale of $120 billion in new coupon-bearing supply.

Treasury yields fell quickly last week as investors worried that job growth will be slow and that the spread of new variants of the coronavirus could result in new business shutdowns.

Analysts say that much of the move was likely technical, however, with investors covering short trades and pouring cash into Treasury exchange-traded funds (ETFs).

Many investors were caught “offsides” said Tom di Galoma, a managing director at Seaport Global Holdings in New York. Now, “you’ve got some profit taking that’s taking place with supply coming,” he said.

The Treasury will sell $58 billion in three-year notes and $38 billion in 10-year notes on Monday, followed by $24 billion in 30-year bonds on Tuesday.

Demand for the longer-dated notes will be watched to see if buyers step in at the lower yields. ( Full Story )

Benchmark 10-year note yields US10YT=RR were last at 1.344%, after falling to 1.250% on Thursday, the lowest since Feb. 16. Thirty-year bond yields US30YT=RR were at 1.967%, after touching 1.856% on Thursday, the lowest since Feb. 2.

Ten-year yields have dropped from 1.544% on June 25 and 30-year yields are down from 2.177% over the same time frame.

Investors will also be watching consumer price inflation data on Tuesday for any indications that price pressures may be becoming embedded in the economy. The Federal Reserve has said that recent inflation increases are likely to be temporary.

Economists polled by Reuters expect the data to show that core inflation increased by 0.4% in June, with a year-on-year increase of 4%.

Oil prices fall as economic worries offset tightening supplies - Reuters News

G20 says coronavirus variants threaten growth
OPEC+ impasse continues, stoking price war fears
U.S. adds oil, gas rigs for another week, data shows

By Noah Browning

LONDON, July 12 (Reuters) - Oil prices slipped on Monday as concerns about slowing global growth outweighed the prospect of tightening supply after talks among key producers to raise output in coming months stalled.

Brent crude LCOc1 for September fell 86 cents, or 1.1%, to $74.69 a barrel by 1240 GMT. U.S. West Texas Intermediate crude CLc1 for August was at $73.71 a barrel, down 85 cents, or 1.1%.

Both benchmarks fell about 1% last week but remain close to highs last reached in October 2018. Brent climbed above $77 last week.

The spread of coronavirus variants and unequal access to vaccines threaten the global economic recovery, finance chiefs of the G20 large economies said on Saturday. ( Full Story )

"Traders are now refocusing on the spread of the COVID-19 pandemic and global concerns over the new variants’ expansion are weighing on prices, despite tightening oil supplies globally," Rystad Energy analyst Louise Dickson said.

The Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, abandoned talks last week over an output deal, which included pumping more oil from August, after a dispute between Saudi Arabia and the United Arab Emirates about how to extend the pact. ( Full Story )

Although failure to agree means less oil in the short term, analysts say the collapse of talks raises the longer term prospect of producers abandoning the deal and pumping at will.

"The market has been a bit negative as of late amid the growing sense that the latest OPEC+ impasse could be a precursor to a pump-and-grab scenario, meaning a lot more oil potentially gets put on the market," said Stephen Brennock of oil broker PVM.

Saudi Arabia and Oman called on Monday for continued cooperation between OPEC and allied producers. ( Full Story )

Front-month WTI crude futures posted a sixth weekly gain last week after a report from the U.S. Energy Information Administration showed U.S. crude and gasoline stocks fell while gasoline demand reached its highest since 2019. ( Full Story )

In response to higher oil prices, U.S. energy firms added oil and natural gas rigs for a second week in a row, data from Baker Hughes showed.

German June wholesale prices +1.5% m/m, +10.7% y/y - Reuters News

July 12 (Reuters) - Germany's Federal Statistics Office reported the following economic indicator on Monday (changes are in percent) DEWPI=ECI :

GERMAN WHOLESALE PRICES June 2021 May 2021 June 2020

Month-on-month change +1.5 +1.7 +0.6

Year-on-year change +10.7 +9.7 -3.3

Index (basis 2015) 112.9 111.2 102.0

Canadian dollar pulls back ahead of Business Outlook Survey

website@sitemodify.com (Website Editor) — Mon, 05 Jul 2021 18:06:00 GMT

Submitted by Victoria, BC Financial Planning | Financial Planning V8W 2B on July 5th, 2021

Canadian dollar weakens 0.3% against greenback
Loonie trades in range of 1.2311 to 1.2360
Price of U.S. oil rises 0.2%
Canadian bond yields rise across steeper curve

TORONTO, July 5 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Monday as attention turned to the release of the summer issue of the Bank of Canada's Business Outlook Survey, with the loonie giving back some of Friday's rally.

The loonie CAD= was trading 0.3% lower at 1.2354 to the greenback, or 80.95 U.S. cents, having traded in a range of 1.2311 to 1.2360.

On Friday, the currency notched its biggest gain in eight weeks, advancing nearly 1%, after some details of the U.S. nonfarm payrolls suggested space for the Federal Reserve to wait before tapering asset buying or hiking rates.

The Business Outlook Survey is due for release at 10:30 a.m. (1430 GMT) on Monday. It could offer clues on the Bank of Canada's policy outlook, with some analysts expecting the bank to cut bond purchases again at next week's policy announcement.

World stocks clung close to record highs, capped by worries about the Delta variant of COVID-19. Trading was thinner than usual with U.S. markets closed for the extended U.S. 4th of July weekend. ( Full Story )

The price of oil, one of Canada's major exports, was driven higher by a disagreement inside OPEC+ about output policy. U.S. crude CLc1 prices were up 0.2% at $75.33 a barrel.

Canadian government bond yields were higher across a steeper curve. The 10-year CA10YT=RR rose 3.2 basis points to 1.406%, after earlier touching its lowest level since March 3 at 1.358%.

Growth in China's June services hits 14-month low - Caixin PMI - Reuters

BEIJING, July 5 (Reuters) - Growth in China's June services sector slowed sharply to a 14-month low, after a resurgence of COVID-19 in southern China, a private survey showed on Monday, adding to concerns the world's second-largest economy may be losing some momentum.

The Caixin/Markit services Purchasing Managers' Index (PMI) fell to 50.3 in June, the lowest since April 2020 and down significantly from 55.1 in May. It held just above the 50-mark, which separates growth from contraction on a monthly basis.

China's official services gauge had also shown a marked slowdown in June, though it remained well in expansion territory. The private survey typically focuses more on smaller companies. ( Full Story )

Coupled with a slowdown in manufacturing, analysts say the PMI survey findings suggest that pent-up COVID demand may have peaked and China's robust economic rebound from the crisis is starting to moderate.

Though slower to recover from the pandemic than manufacturing, a gradual improvement in consumption in recent months had boosted the services sector.

But a COVID-19 outbreak of the more infectious Delta strain in the export and manufacturing hub of Guangdong in May-June and the subsequent imposition of anti-virus measures weighed on consumer and business activity.

A sub-index of new business stood at 50.5 in June, also the lowest since April 2020 when the sector was still paralysed by COVID-19 and lockdowns. Firms also cut staff in June for the first time in four months, as a result of slowing demand.

Karaoke outlets, restaurant owners and cinema operators in Guangdong province told Reuters that their business was adversely impacted by social distancing rules during the latest outbreak.

"Our cinema was closed from early June to early July due to the outbreak in Guangzhou. There were zero customers," said a receptionist surnamed Zhu at Zhongying International Cinema in Guangzhou, the provincial capital.

"But once we reopened on July 3, the customer flow actually increased, most likely because the pandemic is now under control or the summer holiday has begun," Zhu added.

ONE-OFF?

Some economists said the sharp slowdown was a one-off.

"Both official and Caixin services PMIs may rebound in July, driven by the release of pent-up demand for services following the containment of the latest wave of COVID-19 in Guangdong and a likely relaxation of some social distancing rules," said Lisheng Wang, China economist at Nomura.

While the government reacted quickly to contain the new wave of cases, and economic disruptions are easing, the private survey showed services providers' business outlook for the year ahead slipped to the lowest in nine months.

Air travel, accommodation and catering are especially susceptible to new COVID-19 outbreaks, analysts say.

Domestic airline capacity in June, measured by available seat kilometers (ASK), fell to the lowest in two years, according to aviation data provider Variflight. Flight capacity in Guangdong was particularly hit by local COVID-19 cases and summer thunderstorms, it added.

One bright spot in the survey was a marked easing in inflationary pressures, which have squeezed profit margins. Input costs rose at the slowest pace since September 2020, and services firms cut their prices charged for the first time in 11 months to win new business.

Caiman's June composite PMI, which includes both manufacturing and services activity, fell to a 14-month low of 50.6 from May' s 53.8.

Euro zone business activity soared in June as lockdowns lifted - Reuters News

By Jonathan Cable

LONDON, July 5 (Reuters) - Euro zone businesses expanded activity at the fastest rate in 15 years in June as the easing of more coronavirus restrictions brought life back to the bloc's dominant service industry, a survey showed on Monday.

But that surge in growth has come at a cost as inflationary pressures mounted due to labour shortages and disruptions to supply chains caused by the pandemic.

IHS Markit's final composite Purchasing Managers' Index (PMI), seen as a good gauge of economic health, jumped to 59.5 last month from May's 57.1, its highest level since June 2006.

That was ahead of the 59.2 "flash" estimate and well above the 50 mark separating growth from contraction.

"The index was at its 15-year high, confirming that the recovery in bloc's economy is well underway. At the same time, backlogs and producer price pressures show no signs of abating," said Mateusz Urban at Oxford Economics.

"The services PMI sub-index posted an increase. This indicated that the sector has benefited from easing of restrictions and increased consumer optimism on the back of advancing vaccination campaign.

An acceleration in vaccination programmes on the continent has meant governments have allowed more of the services industry to re-open and the sector's PMI soared to its highest reading since July 2007.

Activity in Germany's service industry grew in June at its fastest pace since March 2011 while in France the sector boomed following the easing of COVID-19 restrictions. ( Full Story ) ZRN002C4B

Meanwhile, in Britain - outside the euro zone and the European Union - the post-lockdown bounce-back for services firms eased only slightly in June but price pressures jumped by the most on record. GB/PMIS

World stocks clung close to record highs on Monday as worries about the Delta variant of COVID-19 offset the positive sentiment from surging euro zone business activity. MKTS/GLOB

PRICE RISE

A PMI covering euro zone manufacturers, released last week, showed factory activity expanded at its fastest pace on record in June but that they faced the steepest rise in raw materials costs in well over two decades.

Those inflationary pressures were also felt by the services industry and the composite input prices index bounced to the highest in nearly 21 years.

Although inflation risks are skewed to the upside the European Central Bank was expected to maintain its loose monetary policy and look through higher inflation expectations for a while before it acts, a Reuters poll found last month. ECILT/EU

With demand surging, and amid hopes of further easing of restrictions leading to a more normal way of life, optimism about the coming year improved. The services business expectations index climbed to 72.7 from 71.2, its highest since August 2000.

Investor morale in the euro zone rose for the fifth month in a row in July, its highest level since February 2018, lifted by reopening restaurants and retailers as well as tourism as coronavirus cases fall, another survey showed on Monday

Euro zone investor morale rises on upbeat services sector- Sentix - Reuters News

BERLIN, July 5 (Reuters) - Investor morale in the euro zone rose for the fifth month in a row in July, its highest level since February 2018, lifted by reopening restaurants and retailers as well as tourism as coronavirus cases fall, a survey showed on Monday.

Sentix's index for the euro zone climbed to 29.8 from 28.1 in June. A Reuters poll had pointed to a reading of 30.0.

A current conditions index surged to 29.8 from 21.3 . An expectations index eased to 29.8 from 35.3.

"The massive investments by member states, supported by a continuously expansive monetary policy by the European Central Bank, stabilised the euro zone economy during lockdowns," said Sentix Managing Director Manfred Huebner.

"This mainly helped manufacturing in the last 12 months," he added. "As restrictions are removed, services and trade are now also seeing an upward trend."

Sentix surveyed 1,114 investors from July 1 to July 3.

German service sector continues recovery as lockdown lifted- PMI - Reuters News

BERLIN, July 5 (Reuters) - Activity in Germany's service sector grew in June at its fastest pace since March 2011 as lockdown measures were lifted, particularly benefiting customer-facing businesses, a survey showed on Monday.

IHS Markit's final services PMI measuring activity in the sector rose to 57.5 from 52.8 in May. Yet the reading was lower than a flash value of 58.1.

The composite PMI index, which comprises both the services and manufacturing sectors, rose to 60.1 from 56.2 in the previous month, reflecting the continued recovery of the manufacturing sector. The reading was lower than a flash figure of 60.4.

"The surge in services activity in June was accompanied by a stronger expansion in manufacturing production, which puts the economy on course for a solid growth outturn in the second quarter and potentially an even better performance in the third quarter," said IHS Markit's Principle Economist Phil Smith.

"However, alongside a strong rebound in demand we're seeing costs continuing to soar, with the two factors combining to drive a rise in prices charged by services firms that's unprecedented in more than two decades of data collection."

Business is soaring for UK services firms, and so are prices - PMI - Reuters News

LONDON, July 5 (Reuters) - The post-lockdown bounce-back for British services firms eased only slightly in June but price pressures jumped by the most on record, adding to signs of a further rise in inflation ahead, a survey showed on Monday.

The IHS Markit/CIPS Purchasing Managers' Index for the sector edged down to 62.4 from 62.9 in May but was slightly higher than a preliminary June reading of 61.7.

Job creation was the fastest for seven years but even so staff shortages contributed to the highest level of backlogs since the survey began in 1996. That in turn helped to push up prices by the most on record for inputs and prices charged.

Britain's economy slumped by nearly 10% last year as the country suffered one of the world's highest COVID-19 death tolls.

But this year it is expected to grow faster than the United States and other advanced economies, helped by its early COVID-19 vaccination rollout and huge monetary and fiscal stimulus.

Despite the growth spurt and inflation running above its 2% target, the Bank of England has signalled it is in no rush to ease off on its support. It is waiting to see if unemployment rises as the government winds down its job subsidies over the next three months.

IHS Markit said there was a small fall in exports due to travel restrictions and uncertainty about quarantine policies. Some firms also said Brexit-related issues had dampened export orders to the European Union.

The composite PMI, including previously released manufacturing data, also eased back, slipping to 62.2 from May's 62.9 which was the highest reading since the series began in January 1998.

Canadian dollar gives back some of last week's rally as oil dips

website@sitemodify.com (Website Editor) — Mon, 28 Jun 2021 18:06:00 GMT

The normal narrative for encouraging investors to look at emerging markets typically goes like this: The valuations are cheap, the demographics/rising incomes are supportive of growth, and they offer diversification. Perhaps this is more the marketing narrative. Kind of how, like for infrastructure strategies, they always talk about how many bridges need repairing. We are not refuting any of the above reasons, as they have been rather perennial for many, many years. And yet, for those who know us, we have been rather negative or at least cool on emerging markets for a long time. How long? Well, this negative view persisted for well over a decade. This is us giving ourselves a pat on the back since Emerging Markets (EM) have done roughly nothing for the past 12 years as Developed Markets (DM) have charged higher (chart).

So why are we turning more positive now after so long? First off, it is not all rosy, as there are some big headwinds as well as tailwinds. If everything were positive, EM would have already ripped higher. Investing is probabilities, with an eye on risk to both the upside and downside. Today, we feel there is a good tilt in favour of EM. But first, we will talk about the negatives.
Trade restrictions – For EM nations, exports make up a larger portion of their economies than developed markets, so any increase in tariffs or trade restrictions is negative. Given that China comprises a bit over 20% of the EM universe, the escalation of the China/US trade conflict is a clear risk. When the U.S. raised China tariffs from 3% to 12% during Trump’s presidency, trade gradually adjusted.
Exports out of China bound for the U.S. fell from 21% to 14%. Other countries, such as Mexico, experienced increases in their economy.
We are not going to try to guess who wins the election or to what degree campaign boasting actually affects policy. However, the escalation of trade restrictions, or Trade War 2.0, if you prefer, is a risk for China and other EM nations.
Polarization – T he world has become marginally more polarized over the past years. This has led to increased geopolitical conflicts, or geopolitics have led to increased polarization, which is a bit of a chicken-and-egg question. Regardless, this trend is away from globalization, which is not great for emerging markets.
China – When talking EM, you can’t ignore China. Now, China used to have about a 40% weighting in EM, but this has fallen to around 22% as their market has suffered and other EM countries, including Mexico, Brazil and India, have risen. China is very cheap for some clear reasons, including the trade war risk, the fact their index has a strong technology weighting, and, of course, the ongoing property crisis.
As we said, if everything were positive, there wouldn’t be much of an opportunity. The real question is whether these negatives are bigger than the positives, given the current entry point available. We think the positives are great, and the low entry point offers enough of a margin of safety. Here is the other side, and we are skipping over the standard demographics and diversification arguments.
Valuations – Yes, EM is almost always cheaper than DM, mainly because of greater earnings variability. A dollar of more cyclical earnings is simply worth less. Normally, this would not be a reason, in our opinion. However, the price-to-earnings spread between EM and DM is over 6 points, which is historically very high. Developed markets globally are trading at 18x while EM is around 12x. That kind of spread does have us talking about valuations as a reason to be more positive EM, or at the very least, less fearful of the negatives.

Economic momentum – Everyone knows the U.S. economy has been the more resilient over the past year or two, while other economies have suffered. Today, we are seeing a broadening of economic improvement, including EM. Broader growth and less risk of global recession is good news for both DM and EM, just more so for EM. Notably, global trade is improving. While it is still being influenced by pandemic-induced behavioural changes, rising trade and higher manufacturing activity favour EM. The chart below is global trade, and it is clearly turning up (black line). It hasn’t reached the key 4% growth pace but is moving in the right direction. When global trade is higher, EM tends to outperform DM.

We would add to this central bank activity. Broadly speaking, EM nations raised rates before DM in the past rate hiking cycle. And they have started to cut rates sooner. Again, a positive impact on EM.
Earnings Growth – The relative performance of EM vs DM tracks very well with the relative earnings growth in EM vs DM. Whichever market grouping has better growth normally performs better. In fact, for much of the past decade, during which EM underperformed DM, earnings growth in EM was below that of DM. With forward earnings growth rising back close to parity, this is good news for EM vs DM that we do not believe has been reflected in the relative performance between the two.

While China used to be a much, much larger weight in EM, it is still the biggest single country weight, at just under 25%. The chart above outlines the current weights in one of the larger EM ETFs available. So, let’s talk China a little. The trade war risk is certainly real, with some of the risk mitigated by their gradual migration away from trade bound for the U.S. But the big risk is their real estate crisis. This has really been going on for about three years, and part of us wants to believe that after such a period, much of the bad news has become widely known. There is too much inventory, developers are going bankrupt, soft sales, etc. Often, the cure for a crisis is the passage of time. We’re not saying that ends a crisis, but markets will move on long before it's all over.
So, is it over from a broader market perspective? Economic data from China is always a bit questionable. When Evergrande first surfaced as posterchild for this crisis (like Lehman Brothers for the GFC), we started tracking developers’ share prices. Creating an equal-weighted index of real estate developers listed in China and Hong Kong. Our view was long before the data started to improve, this group of companies would start to recover. Call it our good news canary for China’s real estate crisis. We ignored the move higher in late 2022 as it was driven by some government intervention. And there have been many mini false dawns. Maybe the current uptick will fail again, yet we just don’t think there are many more shoes to drop that haven’t dropped in the past three years.

Final Thoughts

Add all this up, and emerging markets aren’t filling us with jubilation. For the first time in many years, though, we are less fearful and believe the risk/return balance is tilted more toward return.
— Craig Basinger is the Chief Market Strategist at Purpose Investments

Source: Charts are sourced to Bloomberg L.P. and Purpose Investments Inc.

The contents of this publication were researched, written and produced by Purpose Investments Inc. and are used by Echelon Wealth Partners Inc. for information purposes only.

This report is authored by Craig Basinger, Greg Taylor and Derek Benedet Purpose Investments Inc.

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Canadian dollar dips as investors focus on Fed testimony

Tue, 22 Jun 2021 17:53:00 GMT

Submitted by Victoria, BC Financial Planning | Financial Planning V8W 2B on June 22nd, 2021

Canadian dollar weakens 0.2% against the greenback
Price of U.S. oil falls 0.6%
Canada-U.S. 2-year spread widens to 21 basis points

TORONTO, June 22 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Tuesday as oil prices fell and attention turned to testimony by Federal Reserve Chair Jerome Powell, with the loonie giving back some of the previous day's rally.

The loonie CAD= was trading 0.2% lower at 1.2391 to the greenback, or 80.70 U.S. cents. On Monday, it touched its weakest level since April 26 at 1.2485 before recovering to end up 0.8%, its biggest gain in nearly seven weeks.

Powell will testify in a congressional hearing likely to focus on how the U.S. central bank is balancing rising inflation risks with its promise to ensure the economy recovers all the jobs lost after the onset of the coronavirus pandemic. ( Full Story )

Canada is a major producer of commodities, including base metals and oil, which have benefited from Fed stimulus.

U.S. crude oil futures CLc1 fell 0.6% as OPEC+ begins discussions on raising oil production, but a strong demand outlook limited the decline. ( Full Story )

Canada's retail sales report for April is due on Wednesday, which could offer clues on the strength of the domestic economy.

Canadian retailers are readying for a post-pandemic rebound as consumers emerge from lockdowns and open their wallets, but higher costs are eroding their profit margins and fanning inflationary pressures. ( Full Story )

Canadian government bond yields were little changed across the curve, with the 10-year CA10YT=RR trading at 1.413%.

The gap between Canada's 2-year yield and its U.S. equivalent widened by 0.7 basis points to about 21 basis points in favor of the Canadian bond, its widest spread since March last year.

U.S. existing home sales decline as prices surge to record high - Reuters News

WASHINGTON, June 22 (Reuters) - U.S. home sales fell for a fourth straight month in May as record high prices amid low inventory frustrated potential buyers, a trend that could persist for while, with builders unable to deliver more houses because of expensive lumber.

Existing home sales dropped 0.9% to a seasonally adjusted annual rate of 5.80 million units last month, back to their pre-pandemic level, the National Association of Realtors said on Tuesday. Sales fell in the Northeast, West and the densely populated South, but rose in the Midwest.

Economists polled by Reuters had forecast sales falling to a rate of 5.72 million units in May.

Home resales, which account for the bulk of U.S. home sales, surged 44.6% on a year-on-year basis. The annual increase was, however, distorted by the plunge in sales in May 2020, when the economy was reeling from mandatory shutdowns of non-essential businesses to slow the first wave of COVID-19 cases.

The COVID-19 pandemic fueled demand for houses as millions of Americans switched to remote work and schooling. Supply was already tight before the pandemic. Some homeowners were reluctant to list their homes because of fear of contracting the virus from potential buyers touring their properties.

Some elderly Americans likely delayed downsizing due to the pandemic. The virus has disrupted labor supply at saw mills and ports, causing shortages of lumber and other raw materials. That is limiting builders' ability to ramp up construction of new homes. The government last week reported a moderate rebound in homebuilding in May and a drop in permits. ( Full Story )

With inventory tight, bidding wars are rising, threatening to price some first-time buyers out of the market. The median existing house price accelerated a record 23.6% from a year ago to an all-time high of $350,300 in May.

Economists do not believe another housing bubble is developing, noting that the surge is being mostly driven by a mismatch between supply and demand, rather than poor lending practices, which triggered the 2008 global financial crisis. But the rapidly rising prices could feed inflation.

There were 1.23 million previously owned homes on the market in May, down 20.6% from a year ago. At May's sales pace, it would take 2.5 months to exhaust the current inventory, down from 4.6 months a year ago. A six-to-seven-month supply is viewed as a healthy balance between supply and demand.

Properties typically remained on the market for 17 days in May, down from 26 days in May 2020. Eighty-nine percent of the homes sold last month were on the market for less than a month. First-time buyers accounted for 31% of sales in May, down from 34% a year ago.

Euro zone consumer confidence rises to -3.3 in June - Reuters News

June 22 (Reuters) - Euro zone consumer confidence rose by 1.8 points in June from the May number, figures released on Tuesday showed.

The European Commission said a flash estimate showed euro zone consumer morale improved to -3.3 this month from -5.1 in May.

Economists polled by Reuters had expected a rise to -3.0.

In the European Union as a whole, consumer sentiment rose by 1.5 points to -4.5.

UK CBI manufacturing order books +19 in June vs +17 in May - Reuters News

LONDON, June 22 (Reuters) - Following are tabulated results from the latest survey released on Tuesday by the Confederation of British Industry (CBI) about trends in British manufacturing:

CONSENSUS FORECAST: Total order book +18

The balance is the difference between the percentage of manufacturers reporting an increase or above normal and those reporting a decrease or below normal. Output and domestic price expectations are for the next three months.

Data was collected by the CBI between May 25 and June 11 from 304 manufacturers.

Canadian dollar recovers from Friday's 4-week low as oil rises

Mon, 14 Jun 2021 16:31:00 GMT

Submitted by Victoria, BC Financial Planning | Financial Planning V8W 2B on June 14th, 2021

Canadian dollar recovers from Friday's 4-week low as oil rises - Reuters News
Canadian dollar strengthens 0.2% against greenback
Canadian factory sales decrease by 2.1% in April
Price of U.S. oil rises 0.9%

By Fergal Smith

TORONTO, June 14 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Monday as oil prices climbed and investors looked past domestic data showing factory sales falling in April, with the loonie clawing back some of Friday's decline.

Canadian factory sales decreased by 2.1% in April from March, Statistics Canada said. Still, sales were up 1.1% after excluding vehicles and parts. ( Full Story )

"Zooming out from the disruptions seen in the auto industry, the outlook for manufacturing sales is not all that bad," Omar Abdelrahman, an economist at TD Economics, said in a note.

"The reopening of provincial economies and strength in Canada's largest export market (the U.S.) should provide a lift to demand," Abdelrahman added.

The price of oil, one of Canada's major exports, was supported by economic recovery. ( Full Story )

U.S. crude CLc1 prices rose 0.9% to $71.56 a barrel, while the Canadian dollar CAD= was trading 0.2% higher at 1.2143 to the greenback, or 82.35 U.S. cents. On Friday, it fell to its weakest since May 14 at 1.2177.

Speculators have cut their bullish bets on the Canadian dollar, the strongest G10 currency this year, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of June 8, net long positions had fallen to 45,281 contracts from 48,772 in the prior week.

A stronger Canadian dollar is usually seen hurting exporters, but the nature of the global economic recovery could help firms pass on their higher costs from the currency to customers, leaving exporters in less pain than in previous cycles. ( Full Story )

Investors were awaiting a Federal Reserve policy announcement on Wednesday. Expectations that the Fed would stick to its dovish course have helped cap U.S. and Canadian bond yields. ( Full Story )

Canada's 10-year yield CA10YT=RR touched its lowest level since March 3 at 1.365% before recovering to 1.381%, up 1.3 basis points on the day.

Canada April factory sales down 2.1% on autos - Reuters News

June 14 (Reuters) - Canadian factory sales decreased by 2.1% in April from March on transportation equipment, as well as the petroleum and coal products sector, Statistics Canada said on Monday. The auto sector had to ramp down production because of the global shortage of semiconductor chips.

Excluding vehicles and parts, manufacturing sales were up 1.1%.

Month/month change (%)

April Mar(rev) Mar(prev)

Sales -2.1 +4.0 +3.5

Sales ex-autos +1.1 +3.4 +2.9

Inventories +0.8 0.0 -0.4

Unfilled orders -0.1 +0.1 0.0

New orders - 2.5 +5.5 +5.2

April Mar(rev) Mar(prev)

Inv/sales ratio 1.56 1.52 1.53

NOTE: All figures are seasonally adjusted. Analysts in a Reuters poll had predicted factory sales would decline by 1.1% in April from March.

Yields rise from three-month lows before Fed meeting - Reuters News

By Karen Brettell

NEW YORK, June 14 (Reuters) - U.S. Treasury yields rose from three-month lows on Monday as investors waited on the Federal Reserve’s meeting statement on Wednesday for new indications on when the U.S. central bank is likely to begin paring back its unprecedented monetary stimulus.

The Fed is not expected to announce any plans to pare its bond purchases until its August Jackson Hole economic symposium, though it may start dropping hints that it has started to talk about a taper.

Policymakers will also update their economic projections and markets will be focused on whether they upgrade their inflation projections and see a rate hike as likely in 2023.

Treasury yields tumbled last week after data showed a sharp increase in inflation for May, which some analysts interpreted as the market capitulating to the Fed’s view that recent price pressures will be temporary.

Subadra Rajappa, head of U.S. rates strategy at Societe Generale, said that the recent move was more likely driven by positioning as investors betting on further yield rises covered their trades.

“This rally in rates seems very counterintuitive. I still haven’t found a very strong case besides perhaps the offset of positioning, people are getting out of trades ahead of the FOMC,” Rajappa said.

Benchmark 10-year yields US10YT=RR rose one basis point on Monday to 1.47%, after falling to a three-month low of 1.43% on Friday. They have dropped from a one-year high of 1.78% in March.

The risk heading into Wednesday’s meeting statement is that the Fed could sound more hawkish than markets are currently pricing for, as the economy reopens and inflation posts strong increases, Rajappa said.

“It seems like too much of a lull given the risks associated with a taper communication,” she said.

Another key focus at this week’s meeting will be whether the Fed raises the interest its pays on excess reserves (IOER) as money market investors struggle with a lack of high-quality short-term assets.

The Fed’s reverse repo facility, which offers approved money managers the option to lend money to the Fed overnight in return for Treasury collateral, set a record $548 billion on Friday. Demand is expected to continue to grow as the Treasury continues to pare issuance of Treasury bills.

By raising the IOER the Fed can ease some downward pressure on short-term rates. Borrowing rates in the overnight repurchase agreement market USONRP= were at one basis point on Monday.

Some analysts say that the Fed is unlikely to make any adjustments unless the fed funds rate falls below 5 basis points, which it has so far held above. The rate USONFFE= was at 6 basis points on Friday.

Euro zone production stronger than expected in April - Reuters News

BRUSSELS, June 14 (Reuters) - Euro zone industrial production was stronger than expected in April, driven by a more than doubling of durable consumer goods output from a year earlier as economies steadily reopened after COVID-19 pandemic lockdowns, data showed on Monday.

The European Union's statistics office Eurostat said industrial output in the 19 countries sharing the euro rose 0.8% month-on-month for a 39.3% year-on-year surge.

Economists polled by Reuters had expected a 0.4% monthly and a 37.4% annual jump.

The biggest production gain in April against March was in durable consumer goods, where output rose 3.4% after 1.2% monthly declines in both February and March.

In year-on-year terms, the gain in durable consumer goods output was a spectacular 117.3% after a 34.5% annual rise in March, with capital goods also surging 65.4% year-on-year and intermediate goods up 38.7%.

UK shopper numbers dip 6.7% last week after strong previous week - Reuters News

LONDON, June 14 (Reuters) - Shopper numbers across Britain fell 6.7% in the week to June 12 compared with the previous week, which had been boosted by a school holiday and improved weather, researcher Springboard said on Monday.

It said shopper numbers, or footfall, fell 9.0% on high streets week-on-week, by 7.5% in shopping centres and by 0.9% in retail parks.

"UK retail destinations suffered post Bank Holiday blues last week, with footfall dropping back by around half of the uplift recorded in the week before, when the school half-term holiday coincided with the Spring bank holiday and amazing weather," said Diane Wehrle, Springboard's insights director.

Overall UK footfall increased 11.6% in the week to June 5.

Springboard said week to June 12 footfall was down 18.4% compared with the same week in 2019, before the pandemic started to disrupt traffic.

Non-essential stores reopened in England and Wales on April 12 after more than three months of COVID-19 lockdowns. They reopened in Scotland on April 26 and Northern Ireland on April 30. Indoor hospitality was allowed from May 17.

However, British Prime Minister Boris Johnson is expected to announce on Monday that the end of further restrictions will be delayed by several weeks following concerns about a rapid rise of Delta variant infections. ( Full Story )

Springboard said that with the removal of restrictions set to be delayed by as much as a month, footfall is not likely to strengthen significantly over the next four weeks.

"However, it should receive a huge boost in the second half of July, particularly as this coincides with the start of the school summer break," said Wehrle.

Canadian dollar dips as attention turns to BoC rate decision

website@sitemodify.com (Website Editor) — Mon, 07 Jun 2021 17:11:00 GMT

Submitted by Victoria, BC Financial Planning | Financial Planning V8W 2B on June 7th, 2021

Canadian dollar weakens 0.1% against the greenback
Loonie trades in a range of 1.2065 to 1.2106.
Price of U.S. oil falls 0.2%
Canadian 10-year yield rises 1.4 basis points to 1.470%

By Fergal Smith

TORONTO, June 7 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Monday as oil prices slipped and investors awaited a Bank of Canada interest rate decision later in the week, with the currency trading in a narrow range.

The Bank of Canada is widely expected to leave its benchmark interest rate on hold at a record low of 0.25% on Wednesday.

It could dial back some of the optimism it showed at the last policy announcement in April in response to lengthy domestic lockdowns and a weaker-than-expected rebound in the U.S. labor market, Benjamin Reitzes, Canadian rates and macro strategist at BMO Capital Markets, said in a note.

"A more cautious tone from the BoC" is likely, Reitzes said.

In April, the central bank signaled it could start raising its key interest rate from a record low of 0.25% in late 2022 and tapered its bond purchases. ( Full Story )

The price of oil, one of Canada's major exports, eased after touching its highest level since October 2018 at $70 a barrel, pressured by the prospect of higher Iranian exports. ( Full Story )

U.S. crude CLc1 prices fell 0.2% to $69.50, while the Canadian dollar CAD= was trading 0.1% lower at 1.2091 to the greenback, or 82.71 U.S. cents.

The currency, which last Tuesday touched its strongest level in six years at 1.2007, traded in a range of 1.2065 to 1.2106.

Speculators have raised their bullish bets on the Canadian dollar to the highest level since November 2019, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of June 1, net long positions had increased to 48,772 contracts from 44,811 in the prior week.

Canadian government bond yields were mixed across a steeper curve, with the 10-year CA10YT=RR up 1.4 basis points at 1.470%. On Friday, it touched its lowest since May 26 at 1.456%.

China's imports grow at fastest pace in decade as materials prices surge - Reuters News

May exports growth misses expectations
May imports grow at fastest pace since 2011
May trade balance widens but misses forecasts

BEIJING, June 7 (Reuters) - China's imports grew at their fastest pace in 10 years in May, fuelled by surging demand for raw materials, although export growth slowed more than expected amid disruptions caused by COVID-19 cases at the country's major southern ports.

While a brisk recovery in developed markets has bolstered demand for Chinese products, a global semiconductor shortage, higher raw material and freight costs, logistics bottlenecks and a strengthening yuan have dimmed the outlook for the world's largest exporting nation.

China's exports in dollar terms in May grew 27.9% from a year earlier, slower than the 32.3% growth reported in April and missing analysts' forecast of 32.1%.

"Exports surprised a bit on the downside, maybe due to the COVID cases in Guangdong province which slowed down the turnover in Shenzhen and Guangzhou ports," said Zhiwei Zhang, chief economist at Pinpoint Asset Management, adding that turnover at ports in Guangdong will likely remain slow in June.

Major shipping companies warned clients of worsening congestion at Shenzhen's Yantian port in Guangdong province after the discovery of several cases among port staff. ( Full Story )

On the ground in Guangdong, factories have yet to report widespread capacity cuts over the outbreak but admitted efficiency issues as they tried to meet overseas demand.

Chen Linsheng, chief operating officer at Anlan, a Shenzhen-based manufacturer of skincare and beauty-care devices, told Reuters while there was no impact on production, staff are now subject to a series of COVID tests and not allowed back into the factory without a negative result.

"We are not allowed going out (of the city). We need to report in advance and cannot even go to Guangzhou or Foshan on our own," said Chen, adding that a lot of meetings have moved back online.

Besides the impact of COVID cases in Guangdong, the global chip shortage has started to hit all of China's export items related to semiconductors, said Iris Pang, Greater China chief economist at ING.

For example, auto processing products and parts, the biggest export item, fell 4% from a year earlier, Pang added.

Two-year average growth for exports dropped to 23.4% in May from 36.3% in April, pointing to weaker export momentum as the reopening of developed economies reduce demand for personal protective equipment (PPE) and work-from-home (WFH) products, analysts at Nomura said in a note.

At the same time, the currency's extended rally in recent weeks to near three-year highs against the dollar could further saddle U.S. consumers with higher prices.

PRICE-DRIVEN SURGE

Imports increased 51.1% on year last month in dollar terms, the fastest growth since January 2011 but slower than the 51.5% rise tipped by the Reuters poll.

However, that figure -- a gauge of import values, not volumes -- was partly flattered by hot raw materials prices with demand for commodities such as coal, steel, iron ore and copper driven by easing pandemic lockdowns in many countries and ample global liquidity.

Julian Evans-Pritchard, senior China economist at Capital Economics, said while import prices increased at a rapid pace, import volumes probably edged down in May.

"Once again, supply constraints are partly to blame – inbound shipments of semiconductors continued to drop back," he said. "So too did imports of industrial metals."

Indeed, iron ore futures dipped more than 3% on Monday as the trade data cast a shadow over demand prospects. ( Full Story )

China posted a $45.53 billion trade surplus for the month, wider than the $42.86 billion surplus in April but less than the $50.5 billion expected.

The Biden administration is conducting a review of U.S.-China trade policy, ahead of the expiry of the Trump-era "Phase 1" deal at the end of 2021, which called for China to increase purchases of U.S. agricultural goods and manufactured products.

Since President Joe Biden took office in January, China has increased engagement with U.S. trade and economic chiefs. China's Vice Premier Liu He spoke with U.S. Treasury Secretary Janet Yellen last week, just days after talks with U.S. Trade chief Katherine Tai.

China's May forex reserves rise to $3.22 trillion - Reuters News

BEIJING, June 7 (Reuters) - China's foreign exchange reserves, the world's largest, rose more than expected in May, official data showed on Monday, as the U.S. dollar weakened.

The data showed China's foreign exchange reserves rose $23.62 billion to $3.22 trillion last month, compared with $3.208 trillion seen in a Reuters poll of analysts and $3.198 trillion in April.

Foreign inflows into Chinese stocks and bonds have been strong as China gallops ahead of other major economies in its recovery from the coronavirus pandemic.

The yuan CNY=CFXS rose 1.6% against the dollar in May, while the dollar fell 1.6% during that month against a basket of other major currencies =USD .

China held 62.64 million fine troy ounces of gold at the end of May, unchanged from the end of April. The value of China's gold reserves rose to $119.02 billion at the end of May from $110.73 billion at the end-April.

Euro zone investor morale rises to highest level since Feb 2018 - Reuters News

BERLIN, June 7 (Reuters) - Investor morale in the euro zone rose for the fourth month in a row in June, reaching its highest level since February 2018, lifted by reopening restaurants and tourism resuming as coronavirus cases fall, a survey showed on Monday.

Sentix's index for the euro zone climbed to 28.1 from 21.0 in May. A Reuters poll had pointed to a reading of 26.0.

A current conditions index surged to 21.3 from 6.3. An expectations index eased to 35.3 from 36.8 a month earlier.

"The eurozone is increasingly leaving the painful losses of the Corona year behind," said Sentix Managing Director Manfred Huebner. "However, there is a downside to the strong economy and that is foreseeable rising prices."

Sentix surveyed 1,139 investors from June 3 to June 5.

Supply disruptions cause dip in German industrial orders in April - Reuters News

BERLIN, June 7 (Reuters) - German industrial orders dropped unexpectedly in April on falling domestic demand, data showed on Monday, as supply chain disruptions held back manufacturers in Europe's largest economy.

The Federal Statistics Offices said orders for industrial goods fell by 0.2% in seasonally adjusted terms, the first drop this year after three successive increases.

The reading confounded a Reuters forecast of a 1.0% rise and came after an upwardly revised increase of 3.9% in March.

A breakdown of the data showed that domestic demand fell by 4.3% while foreign demand rose by 2.7%.

Both consumer and capital goods posted an increase while intermediate goods contracted by 1%, the data showed.

The German economy contracted by 1.8% in the first quarter as lockdown restrictions in place since November dampened household spending and raw material shortages created manufacturing bottlenecks.

The German economy has withstood the pandemic much better than in neighbouring France or in Italy, mainly as a result of an unprecedented rescue package introduced by Chancellor Angela Merkel's right-left coalition government and a decision to keep factories open during three waves of COVID-19.

Carsten Brzeski, global head of macro at ING, linked the slight drop in orders to supply chain disruptions that were exacerbated by the blockage of the Suez Canal in early April.

"After the very disappointing start to the second quarter, with retail sales dropping by 5.5% month-on-month in April, the second hard data point for the quarter suggests that the expected rebound of the German economy has been slower than expected," Brzeski wrote in a note.

"The rebound in German industry is set to continue, only not necessarily following a straight line," he added.

Germany holds a national election in September. Merkel's conservative bloc holds a slight edge in polls over the ecologist Greens and the two parties are tipped to form a coalition after the election.

UK house prices rise by most since 2014 - Halifax - Reuters News

By David Milliken

LONDON, June 7 (Reuters) - British house prices in May were 9.5% higher than a year earlier, their biggest annual increase since June 2014, adding to signs of a boom in the property market, figures from mortgage lender Halifax showed on Monday.

Britain's housing market has seen a sharp rise in sales and prices over the past year, thanks to a government tax incentive for movers and a jump in demand for more spacious properties from richer households able to work from home.

"Heading into the traditionally busy summer period, market activity continues to be boosted by the government's stamp duty holiday, with prospective buyers racing to complete purchases in time to benefit from the maximum tax break ahead of June's deadline," Halifax managing director Russell Galley said.

House prices in May were 1.3% higher than in April, when they rose by 1.5%. Economists polled by Reuters had on average forecast a 1.2% monthly increase and a 10.0% annual rise.

Other measures of house prices have also shown big increases. Britain's official house price index showed that house prices based on transactions completed in March were 10.2% higher than a year before, the biggest rise since August 2007.

Halifax said it expected upward pressure on house prices would outlive the stamp duty reduction, which will be phased out between July and October.

"The current strength in house prices also points to a deeper and long-lasting change as buyer preferences shift in anticipation of new, post-pandemic lifestyles," Galley said.

"Greater demand for larger properties with more space might warrant an increased willingness to spend a higher proportion of income on housing," he added.

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Oil falls more than $2 after OPEC+ producers agree to raise output - Reuters News

UK shopper numbers up 0.9% last week on weather boost - Reuters News

Market Update as of April 30, 2022

In the markets:

Dollar steadies amid pandemic concerns, inflation in focus

Yields hold above five-month lows before auctions - Reuters News

Oil prices fall as economic worries offset tightening supplies - Reuters News

German June wholesale prices +1.5% m/m, +10.7% y/y - Reuters News

Canadian dollar pulls back ahead of Business Outlook Survey

Growth in China's June services hits 14-month low - Caixin PMI - Reuters

Euro zone business activity soared in June as lockdowns lifted - Reuters News

Euro zone investor morale rises on upbeat services sector- Sentix - Reuters News

German service sector continues recovery as lockdown lifted- PMI - Reuters News

Business is soaring for UK services firms, and so are prices - PMI - Reuters News

Canadian dollar gives back some of last week's rally as oil dips

Final Thoughts

Canadian dollar dips as investors focus on Fed testimony

U.S. existing home sales decline as prices surge to record high - Reuters News

Euro zone consumer confidence rises to -3.3 in June - Reuters News

UK CBI manufacturing order books +19 in June vs +17 in May - Reuters News

Canadian dollar recovers from Friday's 4-week low as oil rises

Canada April factory sales down 2.1% on autos - Reuters News

Yields rise from three-month lows before Fed meeting - Reuters News

Euro zone production stronger than expected in April - Reuters News

UK shopper numbers dip 6.7% last week after strong previous week - Reuters News

Canadian dollar dips as attention turns to BoC rate decision

China's imports grow at fastest pace in decade as materials prices surge - Reuters News

China's May forex reserves rise to $3.22 trillion - Reuters News

Euro zone investor morale rises to highest level since Feb 2018 - Reuters News

Supply disruptions cause dip in German industrial orders in April - Reuters News

UK house prices rise by most since 2014 - Halifax - Reuters News