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Australia's economy rebounds sharply in third quarter, beats forecast – TheChronicleHerald.ca

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By Swati Pandey

SYDNEY (Reuters) – Australia’s economy handily beat forecasts last quarter, rebounding from a coronavirus-induced contraction helped by massive stimulus, while growth is expected to be even stronger this quarter with near-zero new COVID cases.

The economy expanded by 3.3% in the three months to September, data from the Australian Bureau of Statistics (ABS) showed on Wednesday. Economists in a Reuters poll had forecast a 2.6% rise after a 7% contraction in second quarter.

Despite the brisk pace of quarterly growth, GDP still contracted 3.8% on an annual basis, suggesting the recession-stricken economy is not out of the woods yet and that policy support will be needed for some time.

The rebound was led by household spending, which rose 7.9%, the data showed.

But annual output is not expected to reach pre-COVID levels until late next year, provided Australia is able to keep the virus at bay.

The country, which has recorded nearly 28,000 coronavirus cases, has been lauded globally for successfully reopening its economy in late-May after curbing the pandemic.

That, together with A$300 billion ($221.55 billion)in fiscal stimulus and record low cash rate of 0.1%, have boosted jobs, credit demand, home prices and household consumption.

In a sign of solid consumer demand, Australia’s top lender Commonwealth Bank saw nationwide spending on its credit and debit cards jump 12% for the week-ending Nov.23 from last year.

ANZ Banking Group said spending on its cards surged 28% for the week to end-November, helped by Black Friday and Cyber Monday sales.

“Q4 growth is currently shaping up to be solid,” ANZ economists wrote in a note.

“The strong rebound in activity in Melbourne, the broader bounce in consumer and business confidence, along with upside surprises from the high frequency data are currently suggesting that December quarter growth will be pretty solid.”

Victoria state, of which Melbourne is the capital, reopened from its marathon lockdown in late October.

(Reporting by Swati Pandey; Editing by Ana Nicolaci da Costa)

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Economy

Canadian dollar moves to extend weekly win streak as oil rebounds

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Canadian dollar

The Canadian dollar strengthened against its U.S. counterpart on Friday and was on track for its seventh straight weekly gain as oil prices rose and domestic data added to evidence of robust economic growth in the first quarter.

Canadian factory sales rose 3.5% in March from February, led by the motor vehicle, petroleum and coal, and food product industries, while wholesale trade was up 2.8%, Statistics Canada said.

The price of oil, one of Canada‘s major exports, reversed some of the previous day’s sharp losses as stock markets strengthened, though gains were capped by the coronavirus situation in major oil consumer India and the restart of a fuel pipeline in the United States.

U.S. crude prices rose 1.2% to $64.61 a barrel, while the Canadian dollar was trading 0.6% higher at 1.2093 to the greenback, or 82.69 U.S. cents, moving back in reach of Wednesday’s 6-year peak at 1.2042.

For the week, the loonie was on track to gain 0.3%. It has climbed more than 5% since the start of the year, the biggest gain among G10 currencies, supported by surging commodity prices and a shift last month to a more hawkish stance by the Bank of Canada.

Still, BoC Governor Tiff Macklem said on Thursday if the currency continues to rise, it could create headwinds for exports and business investment as well as affecting monetary policy.

The U.S. dollar fell against a basket of major currencies, pressured by a recovery in risk appetite across markets after Federal Reserve officials helped calm concerns about a quick policy tightening in response to accelerating U.S. inflation.

Canadian government bond yields were lower across much of a flatter curve, with the 10-year down 2 basis points at 1.549%. On Thursday, it touched its highest intraday in eight weeks at 1.624%.

 

(Reporting by Fergal Smith; Editing by Nick Zieminski)

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Toronto Stock Exchange rises 1.21% to 19,366.69

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Toronto Stock Exchange

* The Toronto Stock Exchange‘s TSX rises 1.21 percent to 19,366.69

* Leading the index were SNC-Lavalin Group Inc <SNC.TO​>, up 16.0%, Village Farms International Inc​, up 9.8%, and Denison Mines Corp​, higher by 9.4%.

* Lagging shares were Aurora Cannabis Inc​​, down 7.2%, Centerra Gold Inc​, down 3.8%, and Canadian National Railway Co​, lower by 3.7%.

* On the TSX 194 issues rose and 35 fell as a 5.5-to-1 ratio favored advancers. There were 25 new highs and no new lows, with total volume of 225.7 million shares.

* The most heavily traded shares by volume were Enbridge Inc, Manulife Financial Corp and Cenovus Energy Inc.

* The TSX’s energy group rose 3.32 points, or 2.7%, while the financials sector climbed 4.80 points, or 1.3%.

* West Texas Intermediate crude futures rose 2.65%, or $1.69, to $65.51 a barrel. Brent crude  rose 2.68%, or $1.8, to $68.85 [O/R]

* The TSX is up 11.1% for the year.

This summary was machine generated May 14 at 21:03 GMT.

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Economy

U.S., Mexico, Canada to hold ‘robust’ talks on trade deal

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The United States, Mexico and Canada will next week hold their first formal talks on their continental trade deal, with particular focus on labor and environmental obligations, the U.S. government said on Friday.

Trade ministers from the three nations are set to meet virtually on Monday and Tuesday to discuss the U.S.-Mexico-Canada (USMCA) deal, which took effect in July 2020.

“The ministers will receive updates about work already underway to advance cooperation … and will hold robust discussions about USMCA’s landmark labor and environmental obligations,” the office of U.S. Trade Representative Katherine Tai said in a statement.

The United States is also reviewing tariffs which may be leading to inflation in the country, economic adviser Cecilia Rouse told reporters at the White House on Friday, a move that could affect hundreds of billions of dollars in trade.

The United States, testing provisions in the new deal aimed at strengthening Mexican unions, this week asked Mexico to investigate alleged abuses at a General Motors Co factory.

(Reporting by David Ljunggren; Editing by Hugh Lawson and Jonathan Oatis)

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