LONDON (Reuters) – Global shares fell and the dollar hit a two-month high on Thursday on investor concern about another economic hit from the coronavirus pandemic, ahead of key U.S. jobless data and comments from the head of the Federal Reserve.
After a summer lull in much of Europe, the infection rate has begun to rise sharply, with a number of countries including Britain introducing tougher rules to help limit the spread of the virus.
Fears that a market rebound in recent months had gone too far held stocks back, although positive German and French business sentiment data helped pare European losses slightly as did U.S. stock futures pointing to a flat open.
The MSCI World .MIWD00000PUS> index was down 0.5% at 1018 GMT, its fifth day in the red out of the last six and hovering near a two-month low. A broad gauge of Europe’s top shares, the STOXX Europe 600 .STOXX>, was down 0.4%.
S&P 500 futures were flat nearing midday, holding steady after falls in the prior session after economic warnings from U.S. Federal Reserve officials.
That had, in turn, helped tee up weakness overnight in Asia with Asia Pacific shares outside Japan .MIAPJ0000PUS> down 1.99% to chalk up their worst day in two months.
“Optimism on the recovery, optimism on the virus, and bets on stimulus were keeping markets well bid, and on all three of these issues, there has been a degree of disappointment this month,” said John Velis, an FX and macro strategist at BNY Mellon.
High-grade euro zone government bond yields fell across the board on an expectation that stimulus measures would be maintained, with the German 10-year down 2.2 basis points. The U.S. 10-year was dowm 0.5 basis points.
Despite markets betting on more U.S. fiscal stimulus, political stalemate in Washington continues to frustrate efforts to prop up the world’s biggest economy, beset by one of the worst COVID-19 death rates globally.
“A U.S. fiscal deal was baked into markets and now what you are seeing is that the probability of a deal going through has simply reversed,” said Justin Onuekwusi, a London-based portfolio manager at Legal and General Investment Management.
“We have heard this week how important a fiscal deal is to the Federal Reserve but from a political standpoint, focus has moved more towards the election and Supreme Court deliberations rather than the economy,” he added.
Flows into the dollar =USD> helped it rise for a fourth straight day. Although gains had been pared slightly from the open, it remains on track to record its longest streak of daily gains since June.
The slight perk-up in sentiment helped Brent crude futures recover early losses to trade flat at $41.80 a barrel although gold remained lower, down 0.6% and on course for a fourth day of losses that total nearly 7%.
The euro was flat at $1.1658.
With central bankers in focus globally, U.S. Federal Reserve Chair Jerome Powell will be closely watched later in the day when he testifies before the Senate Banking Committee, while other Fed officials are scheduled to speak at other events during the day.
Investors are also waiting for weekly data due later on Thursday, which is expected to show U.S. jobless claims fell slightly but remained elevated, indicating the world’s largest economy is far from recovering.
A similar picture was visible in Europe, where the European Central Bank’s latest Economic Bulletin said unemployment would continue to rise in the euro zone, with little growth in demand seen for consumer goods.
Elsewhere among regional ratesetters, the Swiss National Bank maintained its easy monetary policy, but turned less gloomy on the impact of the pandemic. In Britain, meanwhile, the finance minister launched a new jobs support scheme.
In emerging markets, Turkey surprised markets with a hike in its policy rate by 200 basis points to 10.25%, sending the lira and bonds higher. Mexico is also set to decide on monetary policy later on Thursday.
MSCI’s Emerging Markets Index .MSCIEF> was down 1.8%.
(Graphic: COVID-19 new daily cases – https://fingfx.thomsonreuters.com/gfx/mkt/gjnvwjjbbpw/Pasted%20image%201600941249476.png)
(Additional reporting by Imani Moise in New York, Marc Jones, Saikat Chatterjee and Sujata Rao in London; Editing by John Stonestreet, Andrew Heavens and Chizu Nomiyama)
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
