Economy

ECB set for policy decision as coronavirus sends the euro zone economy into a tailspin – CNBC

Published

4 years ago

April 30, 2020

The European Central Bank‘s (ECB) Governing Council will convene in a virtual meeting Thursday to discuss whether the measures taken, for now, are enough to weather what could be the worst economic crisis since World War II.

The odds are high that ECB President Christine Lagarde will stress the central bank’s ability to do more if needed in order to avoid fragmentation in the euro area and a tightening of financial conditions.

“There are two objectives the ECB will focus on at that stage. First, to ensure accommodative financial conditions and preventing tensions in the financial system,” said Dirk Schumacher, an ECB watcher with Natixis, in a research note.

“Second to create fiscal space for governments to fight the cyclical consequences of the pandemic.”

To manage the second objective, the ECB is trying to rein in spread expansions between the core and so-called peripheral countries such as Italy, Spain, Portugal and Greece. A spread refers to the difference in the yields between countries, which can highlight how fearful investors have become on owning European debt.

The new 750 billion euro ($815 billion) Pandemic Emergency Purchase Programme (PEPP) has a lot more flexibility than the bank’s “normal” Asset Purchase Program, according to a legal opinion which was published March 24 in the official journal of the EU.

“Surely the ECB would have hoped to be safe for much longer after launching its PEPP bazooka on March 18, but the reality is that the economic and political situation remains highly challenging with the central bank still perceived as the only credible bulwark against an unwarranted tightening of financial conditions,” said Frederik Ducrozet of Pictet Wealth Management in a note.

The euro zone economy is in a tailspin. Business activity surveys for April came in at record lows last week, the German Ifo Index never been lower, and many economists predict the economy is going through its worst recession since the 1930s.

“It will be an opportunity to take stock, as the first hard data for Q1 (the first quarter) start coming in, painting a clearer picture of the initial damage to the economy,” said Anatoli Annenkov with Societe Generale in a note to clients.

“Unless there is another bond market scare we would expect the ECB to remain on hold for now while fine-tuning collateral and supervisory rules to support credit flows.”

The ECB’s April lending survey shows that credit standards for loans to enterprises and households have tightened in the first quarter, while demand for loans and drawing of credit lines have surged.

“At the very least, the ECB will be under pressure to signal the possibility of an increase in the 750 billion euro envelop sooner rather than later,” said Ducrozet.

Whether the PEPP will be big enough is already being questioned by some economists. For now the ECB is expected to hold steady and analyze the current measures.

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Economy

S&P/TSX composite gains almost 100 points, U.S. stock markets also higher

Published

9 hours ago

September 13, 2024

Anne Joseph

TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.

The S&P/TSX composite index closed up 93.51 points at 23,568.65.

In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.

The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.

The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.

The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

Statistics Canada reports wholesale sales higher in July

Published

16 hours ago

September 13, 2024

Anne Joseph

OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.

The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.

The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.

The personal and household goods subsector fell 2.5 per cent to $12.1 billion.

In volume terms, overall wholesale sales rose 0.5 per cent in July.

Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.

This report by The Canadian Press was first published Sept. 13, 2024.

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Economy

S&P/TSX composite up more than 150 points, U.S. stock markets mixed

Published

2 days ago

September 12, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 172.18 points at 23,383.35.

In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.

The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.

The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.

The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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