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Australia's Surging Terms of Trade Delivers Boost For Economy – BNN

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(Bloomberg) — Australia’s surging terms of trade — a measure of export prices relative to import prices — is set to deliver a much-needed windfall for government coffers while posing a currency headache for the Reserve Bank.

Export prices jumped 5.5% in the final three months of last year, reflecting surging demand for iron ore from China’s recovering economy, government data showed Thursday. That came in the face of a higher currency that compressed import prices by 1% in the period.

Iron ore, Australia’s largest export, soared more than 70% last year as stimulus-aided demand in China helped drive steel production to an all-time high. It has edged back a little in recent days, but is still trading at over $160 a ton, levels unseen since Australia’s last mining-investment boom at the beginning of the last decade.

Australia’s government persistently lowballs its budget estimate of the metal’s price in an effort to avoid repeating past downside fiscal surprises. It forecasts a return to $55 a ton by the end of September, so the excess will bring a windfall to government coffers through company tax payments and associated charges. The Aussie dollar, meanwhile, has surged 33% since its March nadir when it hit 55 U.S. cents.

The typical complication of a higher currency is muted at present with restricted international people movements due to Covid-19. Yet, Thursday’s data highlighted the negative currency impact on commodity lines such as meat, where competition is greater in the global market.

Previously, the RBA estimated a 10% gain in the real exchange rate could cut export volumes by 3% and increase import volumes by 4% after two years, implying a net drag on gross domestic product of 1.5 percentage points. For a recovering economy, these sorts of calculations are going to count.

©2021 Bloomberg L.P.

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Canada Dollar dips as short-covering propels greenback broadly higher

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Canadian dollar

By Fergal Smith

TORONTO (Reuters) – The Canadian dollar edged lower against its U.S. counterpart on Monday but fared better than most other G10 currencies as the United States moved closer to passing fiscal stimulus and ahead of an interest rate decision by the Bank of Canada on Wednesday.

The loonie was trading 0.1% lower at 1.2666 to the greenback, or 78.95 U.S. cents.

“We have seen some modest defensiveness with respect to the loonie,” said Bipan Rai, North America head, FX strategy at CIBC Capital Markets. “It just feels like the market is closing up shorts in U.S. dollars.”

The safe-haven U.S. dollar notched a 3-1/2-month high against a basket of major currencies as elevated U.S. Treasury yields spooked investors.

Pressure on the loonie was less than on some other currencies because Canadian yields have been keeping pace with the recent move higher in U.S. yields and oil has climbed, Rai said.

Besides the greenback, the only other G10 currency to gain ground against the Canadian dollar on Monday was the Norwegian crown.

The U.S. Senate on Saturday passed the stimulus package, and President Joe Biden said he hoped for quick passage of the revised bill by the House of Representatives.

Canada sends about 75% of its exports to the United States, including oil.

Oil settled 1.6% lower at $65.05, giving back some recent gains, after Saudi Arabia said there were was no loss of property following attacks on its oil facilities.

Investors see rising chances that the Bank of Canada would hike interest rates next year as the economic outlook improves, but the central bank is likely to push back against those bets for now, pointing to still high unemployment, analysts say.

Canada‘s 10-year yield touched its highest since January last year at 1.545% before dipping to 1.521%, up 1.9 basis points on the day.

 

(Reporting by Fergal Smith; Editing by Marguerita Choy and Jonathan Oatis)

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Freeland announces 18-member task force on women and the economy ahead of 2021 budget – The Globe and Mail

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Minister of Finance Chrystia Freeland responds to a question after delivering the 2020 fiscal update in the House of Commons on Parliament Hill in Ottawa on Nov. 30, 2020.

Sean Kilpatrick/The Canadian Press

Timed to coincide with International Women’s Day, Finance Minister Chrystia Freeland has announced the creation of an 18-member Task Force on Women and the Economy.

The panel will begin meeting this month in advance of the 2021 budget, which has not yet been scheduled. The Globe and Mail reported Monday that the Liberal government has ruled out releasing a budget in March or early April, meaning more than two years will have passed since the last federal budget was released in March, 2019.

Ms. Freeland’s Monday announcement said women represented the majority of workers in industries that have been the most affected during the pandemic, such as service, hospitality and tourism.

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In the fall economic statement, Ms. Freeland said the 2021 budget will include a plan to spend up to $100-billion over three years on supporting Canada’s post-pandemic recovery.

Also on Monday, Ms. Freeland will host the opening discussion at a two-day federal conference called Canada’s Feminist Response and Recovery Summit.

The panel features Armine Yalnizyan, an economist and Atkinson Fellow who has popularized the term “she-session” to describe the fact that women are facing disproportionally negative economic consequences as a result of the pandemic. Ms. Yalnizyan is also on the new task force.

The other three summit panelists are Monique Leroux, former president and chief executive officer of Desjardins Group and chair of the federal Industry Strategy Council, which issued policy recommendations for the government in December; former Indspire CEO Roberta Jamieson; and Sarah Kaplan, Director of the Institute for Gender and the Economy at the University of Toronto.

The women on the new task force include CEOs, child care advocates, economists, academics, and labour and Indigenous leaders.

In a report this month, RBC economists Dawn Desjardins and Carrie Freestone warned that the effects of the pandemic will mean that women are more likely than men to face an extended period of joblessness this year.

The RBC report found that almost half a million Canadian women who lost their jobs during the pandemic had not returned to work as of January.

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“Women have shouldered a heavier burden when the pandemic added home-schooling to their load,” it said. “In the last year, 12 times as many mothers as fathers left their jobs to care for toddlers or school-aged children.”


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Women Will Come To The Fore In The Feeling Economy – Forbes

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A recent study from Lero, the Science Foundation Ireland Research Centre for Software, towed a familiar path.  It revealed that adding women to software development teams not only boosted team performance but also reduced workplace delinquency.

“Companies should recruit more women to their development teams not only for obvious ethical reasons but because this will improve performance. Indeed, women software engineers significantly differ from men in terms of personality traits, which are related to higher job performance, ethics, and creativity. Men, despite having lower scores on emotionality, exhibit higher scores on the psychopathy trait, which may lead to a reduced level of team performance,” the researchers argue.

The thing is, should we training girls to enter “male” occupations or should we instead be simply themselves? It’s a notion that Roland Rust and Ming-Hul Huang believe will be at the heart of what they refer to as the “feeling economy” in their eponymous book.

The feeling economy

The feeling economy marks the transition from both the physical economy, where our economies were driven largely by brute force, into the thinking economy, where brains and logic were the determining factors, and into the feeling economy that will come to be dominated more by emotional intelligence, empathy, and creativity.

It’s a transition that is largely driven by improvements in technologies, such as AI and robotics, which mean that both physical and thinking economy work can be done more effectively by machines than by humans. It also means that it’s an economy that they believe will come to be dominated by women, who tend to be stronger in the kind of traits that will come to the fore.

“In the feeling economy, we expect that females will outnumber males for higher pay feeling jobs, such as healthcare and education,” they say. “In fact, those service industries are growing much faster than manufacturing, which is stagnant or declining.”

Skills for the future of work

It’s also noticeable that in Google’s famous Project Oxygen a few years ago, they found that of the eight skills associated with Google employees’ jobs, STEM skills were bottom of the pile in terms of importance. Far more important was the kind of soft skills that humans, and especially women, excel in.

And yet, as Tomas Chamorro-Premuzic famously pointed out several years ago, we still tend to recruit and promote men who are often wholly lacking in these skills. Hence, we tend to get men who are “self-centered, overconfident and narcissistic individuals as leaders”.

Which is wholly detrimental to our organizations, and even to society more broadly. During the pandemic, the compassionate leadership of the likes of New Zealand’s Jacinda Arden and Germany’s Angela Merkel were lauded after data from the World Economic Forum showed that countries with female leaders fared better. 

Similarly, research from the University of Buffalo says that female leaders tend to fit the servant leadership mold that is so important in our current time better than their male peers.

Supporting innovation

This kind of servant leadership also plays a crucial role in supporting the kind of innovations that will be so important in the years ahead. The importance of the “pivot” has been a fundamental part of the entrepreneurial playbook for much of the near-decade it’s been since Eric Ries first published his groundbreaking The Lean Startup but the ability to adapt has been especially crucial during a pandemic in which so much of what we thought we knew has been tipped upside down.

While research suggests that we tend to think of men as more creative than women, the reality is quite the opposite. The dichotomy exists in large part because we falsely assume that innovation is simply having a “eureka” moment. A second study examined the various areas in which managers support innovation, including encouraging employees to pursue a broad range of knowledge, capturing any ideas they have, managing diverse teams, stretching employees, and providing feedback. Interestingly, across all eight of the domains, women outperform men.

The importance of psychological safety has been well documented due to the groundbreaking work of Harvard’s Amy Edmondson, but research from Cambridge’s Judge Business School shows that this is especially important during a crisis. Perhaps most importantly, the strong presence of women helped to provide the kind of psychological safety that is so important.

Holding women back

Despite the evident benefits women bring to teams and organizations, there continue to be numerous psychological biases that prevent them from contributing to their fullest.

For instance, research from Wharton’s Adam Grant revealed that it’s actually incredibly difficult for women to speak up with challenging ideas, whether involving innovations or otherwise. He reveals that when men do this, they tend to get praised in subsequent performance reviews, but for women, the reverse is true. 

A subsequent Yale study shows that this effect is not diminished when women gain leadership roles either. Indeed, the leadership capabilities of powerful women were diminished the more outspoken they were.

If, as Rust and Huang argue, we’re entering the age of the Feeling Economy, then the skills women so often bring to our organizations will be more important than ever before. It’s vital, therefore, that we find ways to remove those barriers and those biases that so often hold women back.

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