SINGAPORE/NEW YORK (Reuters) – Asian stocks inched up on Friday, despite Wall Street declines, but struggled to make deeper gains as worries about a faltering economic recovery kept investors to the sidelines or seeking safer harbour in assets such as the Japanese yen.
Oil prices held hefty overnight gains after OPEC flagged a crackdown on member states that did not cut output and the dollar was back to nursing losses after a brief journey higher in the wake of Wednesday’s Federal Reserve meeting.
MSCI’s broadest index of Asia-Pacific shares outside Japan looked set to end the week 1% ahead following two weeks of tech-led losses. It rose 0.2% on the day while market moves around the region were small.
Japan’s Nikkei edged 0.1% higher. The ASX 200 was flat, while stocks in Shanghai, Hong Kong and Seoul rose between 0.2% and 0.4%.
U.S. stock futures were soft, with S&P 500 futures down 0.2%, though Nasdaq 100 futures turned positive by the middle of the Asia session to trade 0.07% higher.
“The bigger picture issue is that markets, particularly growth and tech stocks, have run very hard into the end of August, which has left them somewhat vulnerable,” said AMP Capital chief economist Shane Oliver.
“There’s uncertainty ahead of the U.S. elections…China-U.S. tensions keep creeping in and on top of that there’s now uncertainty about how the recovery will proceed from here in the absence of more stimulus in the U.S.”
Overnight data showed recovery in the U.S. labour market stalling and Wall Street indexes fell for a second straight session amid disappointment that the Fed made no new monetary easing commitments at its meeting this week.
The S&P 500 ended down 0.84%, and the Nasdaq dropped 1.27%. The Nasdaq’s losses put the index down roughly 10% from a record high hit early in September and have it tracking for its worst month since March.
“Unlike June, there is more fear of a deeper correction,” analysts at Singapore’s DBS Bank said in a note – since the Nasdaq is below its 50-day moving average, a key technical support level, and the U.S. election is fast approaching.
“The landscape is more challenging compared to three months ago.”
YEN RALLIES
In contrast to the Fed, the Bank of England made clear overnight that it is open to further aggressive easing and is looking closely at taking interest rates negative.
That dovish tone sent the pound sharply lower before it recovered as the dollar weakened in the New York session. [FRX/]
The Japanese yen also rose overnight, shrugging off a dovish-sounding Bank of Japan to ride a softer greenback and a safety bid to a seven-week peak of 104.52 per dollar. It held there on Friday, though some traders think it can rise further.
“The relative balance sheet trend between the Bank of Japan and Fed can contribute to downside pressure on dollar/yen,” said Commonwealth Bank of Australia currency analyst Joe Capurso.
In commodity markets, oil held sharp gains after OPEC and its allies said the group will take action on members that are not complying with deep output cuts. [O/R]
Brent crude futures were last 0.2% firmer at $43.39 a barrel and U.S. crude futures rose by the same margin to $41.04 a barrel.
U.S. Treasuries picked up where they left off, with yields on 10-year U.S. government debt at 0.6838% after concerns about possible inflation rises in the future helped reverse a bond rally in overnight trade. [US/]
Later on Wednesday, U.S. consumer confidence data is due and Fed board member James Bullard is to make a speech on the challenges of the COVID-19 recovery, both at 1400 GMT.
(Reporting by Tom Westbrook in Singapore and John McCrank in New York; Editing by Sam Holmes)
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.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
