LONDON (Reuters) – World shares hit two-week lows and oil fell nearly 2% on Monday as the relentless spread of the coronavirus curbed optimism on the global economy, prompting investors to take shelter in safe-haven bonds and gold.
European stocks opened slightly lower, after Asian shares ended deep in the red playing catch up with Wall Street’s ugly close on Friday as some U.S. states reconsidered their reopening plans.
The global death toll from COVID-19 reached half a million people on Sunday, with one quarter of those in the United States, where cases have surged in a handful of southern and western states.
MSCI’s world shares index was off 0.2%, hitting its lowest level since June 15 dragged down by Japan’s Nikkei shedding 2.2% and Chinese blue chips off 0.9%. E-Mini futures for the S&P 500 were up 0.1%.
“The market is caught in a real battle between recovery optimism and news of increasing cases in certain geographical areas such as the U.S,” said John Woolfitt, director of trading at Atlantic Capital Markets.
“I think this battle will remain until the U.S. get a handle on it.”
Sovereign bonds benefited from the shift to safety with yields on U.S. 10-year notes near 0.64%, having briefly been as high as 0.96% early in June. German government bond yields clung to one-month lows on Monday.
The U.S. dollar has generally gone in the opposite direction, rising to 97.334 against a basket of currencies from a trough of 95.714 earlier in the month.
It had less luck on Monday, easing back to 107.18 yen, though it remained well within the recent range of 106.06 to 107.63. The euro stood at $1.1245 having found solid support around $1.1167. [USD/]
“Financial markets remain extremely fragile, having to weigh worsening virus news against improving economic data,” said Marija Veitmane, senior strategist at State Street Global Markets.
It is an important week for U.S. data with the ISM manufacturing index on Wednesday and payrolls on Thursday, ahead of the Independence Day holiday. Federal Reserve Chair Jerome Powell is also testifying on Tuesday.
“U.S. economic data will reinforce that the economy is through the worst of the recession in our view,” said CBA currency analyst Joseph Capurso.
“But a double‑dip recession is possible if widespread restrictions are reimposed, leading to a surge in the dollar.”
In commodity markets, gold held near its highest since early 2012 at $1,773 an ounce. [GOL/]
Oil prices slipped amid concerns the pandemic would slow the reopening of some economies and thus hurt demand for fuel. [O/R]
Brent crude futures fell 69 cents to $40.33 a barrel, while U.S. crude lost 62 cents to $37.87.
Graphic: Asia stock markets https://product.datastream.com/dscharting/gateway.aspx?guid=516bc8cb-b44e-4346-bce3-06590d8e396b&action=REFRESH
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
