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Bank of Canada sees economy strengthening as inoculations pick up – Reuters

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OTTAWA (Reuters) – Canada’s economy will see a solid and sustained rebound this year as inoculations ramp up, Bank of Canada governor Tiff Macklem said on Tuesday, while warning that Canada’s red-hot housing market is starting to show signs of “excess exuberance.”

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Macklem, speaking with an Alberta business audience, said that as more Canadians are inoculated, the hardest-hit segments of the economy will be able to begin resuming operations, resulting in strong job growth.

“Clearly getting vaccines into Canada and into Canadians is top priority,” he said. “The sooner we achieve widespread immunity and can get back to more normal activities, the stronger and more sustained will be the recovery.”

He earlier said that vaccines “promise a more sustained recovery” coming out of the second wave of COVID-19 infections.

Answering an audience question about housing, Macklem noted a fundamental shift in buyer needs during the pandemic, but also said for the first time that the central bank is starting to see signs of froth in the hot housing market.

“When we see extrapolative expectations, when we see people starting to buy houses solely because they think the prices are going to go up, that is a warning sign for us. We are starting to see some early signs of excess exuberance,” he said.

He later told reporters the Bank does not yet see the need for new measures to dampen the market.

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In his speech, Macklem said it would be “some time” before Canada saw a full recovery, noting the pandemic had accelerated a trend toward automation, with many low-wage jobs at high risk of being affected.

He also pointed to a “likely permanent” trend toward e-commerce, predicting the economy may need “significantly fewer” retail workers.

“We are not returning to the same economy we had before the pandemic. Even as it recovers, the economy is adapting to structural changes, and some workers will need to shift to jobs in faster-growing sectors,” he said.

Macklem reiterated interest rates would remain at their effective lower bound until economic slack is fully absorbed, which the bank says should occur in 2023.

The Canadian dollar steadied at about 1.2595 per U.S. dollar, or 79.40 U.S. cents, after the speech, near a three-year high.

Additional reporting by Fergal Smith in Toronto; editing by Jonathan Oatis and Aurora Ellis

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Britain is ‘bouncing back’ into the same old economy – The Guardian

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Britain is ‘bouncing back’ into the same old economy  The Guardian



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CANADA STOCKS – TSX ends flat at 19,228.03

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* The Toronto Stock Exchange’s TSX falls 0.00 percent to 19,228.03

* Leading the index were Corus Entertainment Inc <CJRb.TO​>, up 7.0%, Methanex Corp​, up 6.4%, and Canaccord Genuity Group Inc​, higher by 5.5%.

* Lagging shares were Denison Mines Corp​​, down 7.0%, Trillium Therapeutics Inc​, down 7.0%, and Nexgen Energy Ltd​, lower by 5.7%.

* On the TSX 93 issues rose and 128 fell as a 0.7-to-1 ratio favored decliners. There were 26 new highs and no new lows, with total volume of 183.7 million shares.

* The most heavily traded shares by volume were Toronto-dominion Bank, Nutrien Ltd and Organigram Holdings Inc.

* The TSX’s energy group fell 1.61 points, or 1.4%, while the financials sector climbed 0.67 points, or 0.2%.

* West Texas Intermediate crude futures fell 0.44%, or $0.26, to $59.34 a barrel. Brent crude  fell 0.24%, or $0.15, to $63.05 [O/R]

* The TSX is up 10.3% for the year.

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Canadian dollar outshines G10 peers, boosted by jobs surge

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Canadian dollar

By Fergal Smith

TORONTO (Reuters) – The Canadian dollar advanced against its broadly stronger U.S. counterpart on Friday as data showing the economy added far more jobs than expected in March offset lower oil prices, with the loonie also gaining for the week.

Canada added 303,100 jobs in March, triple analyst expectations, driven by the recovery across sectors hit by shutdowns in December and January to curb the new coronavirus.

“The Canadian economy keeps beating expectations,” said Michael Goshko, corporate risk manager at Western Union Business Solutions. “It seems like the economy is adapting to these closures and restrictions.”

Stronger-than-expected economic growth could pull forward the timing of the first interest rate hike by the Bank of Canada, Goshko said.

The central bank has signaled that its benchmark rate will stay at a record low of 0.25% until 2023. It is due to update its economic forecasts on April 21, when some analysts expect it to cut bond purchases.

The Canadian dollar was trading 0.3% higher at 1.2530 to the greenback, or 79.81 U.S. cents, the biggest gain among G10 currencies. For the week, it was also up 0.3%.

Still, speculators have cut their bullish bets on the Canadian dollar to the lowest since December, data from the U.S. Commodity Futures Trading Commission showed. As of April 6, net long positions had fallen to 2,690 contracts from 6,518 in the prior week.

The price of oil, one of Canada‘s major exports, was pressured by rising supplies from major producers. U.S. crude prices settled 0.5% lower at $59.32 a barrel, while the U.S. dollar gained ground against a basket of major currencies, supported by higher U.S. Treasury yields.

Canadian government bond yields also climbed and the curve steepened, with the 10-year up 4.1 basis points at 1.502%.

 

(Reporting by Fergal Smith; Editing by Andrea Ricci)

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