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Bank of Canada sees gradual recovery after initial bounceback – BNN

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The Bank of Canada is taking a more cautious tone on the recovery, with expectations for a bumpy and gradual road toward full recuperation.

While the central bank is seeing evidence of a quick, initial bounceback in economic activity as provinces reopen, the second stage of recovery will be more “prolonged and uneven,” Deputy Governor Lawrence Schembri said in a speech to the Greater Saskatoon Chamber of Commerce.

“The uncertainty around this recuperation stage is extraordinary and points toward a recovery that will be gradual and long-lasting as this uncertainty slowly dissipates and household confidence is restored,” Schembri said in the remarks delivered by video-conference. “In the meantime, households are likely to remain cautious in their spending behaviour as they adjust to a new ‘post-pandemic’ normal.”

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It’s also unclear how consumer spending patterns may change in the future. During the pandemic, consumers increasingly turned toward online food shopping and delivery. Schembri said cautious spending is likely to continue until a vaccine becomes available. As a result of less money flow, employment and income will take time to recover fully.

The willingness of Canadians to go out and spend money is going to depend on what the employment, income and confidence situation is, as well as the possibility of future COVID-19 outbreaks, he said.

Recent data show hopeful signs for the labor market as job postings have picked up and employment rose. Still, Schembri said there are more persistent disruptions in the job market that could slow the recover in the second phase such as permanent layoffs among those in the already struggling oil-producing regions. He also noted that women working in service industries have been disproportionately affected by the layoffs and that they are also more likely to face a lack of childcare.

In the speech, Schembri expressed optimism that Canada avoided the worst of the economic fallout from COVID-19. Consumer confidence data, motor vehicle sales and housing activity in May have all improved from April.

“These early indicators suggest that the trough in economic activity and household spending occurred in April and that the more severe outcome depicted in our April Monetary Policy Report has been avoided,” he said. “Fiscal and monetary policy actions have underpinned this nascent rebound in demand.”

The federal government’s support programs have helped to buffer some of the income losses felt by millions of Canadians. The federal aid is expected to help bolster consumer spending during the second phase of the recovery. Schembri noted recent data has also shown a rise in the savings rate, which indicates there will be pent up demand when consumers begin to feel comfortable going out and spending money.

The provinces have reopened in staggered time frames which makes it difficult for the bank to estimate the overall recovery path. Ontario, for example has pursued a more gradual reopening than Saskatchewan and Alberta.

“We expect that the recovery will vary by region because containment measures are being lifted at different times across Canada,” he said. “This staggered reopening of establishments and manufacturing facilities across the country adds an additional layer of uncertainty in estimating the path of the recovery in overall household spending.”

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'No mask. No ride': Uber will require drivers and passengers to wear face masks indefinitely – USA TODAY

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Uber is extending its mask requirement indefinitely throughout the U.S. and Canada as coronavirus cases continue to rise across several states.

The company previously said that both drivers and riders are required to wear masks during trips through June. On Wednesday, the company said it’s extending that rule.

“Extending our ‘No Mask, No Ride’ policy is the right thing to do,” Uber said in a statement. “We want to send a clear message to everyone using Uber that we all have a role to play to keep each other safe.” 

The decision was made based on guidance from the Centers for Disease Control and Prevention. The company also notes the public rise in coronavirus cases. Texas, New Mexico and California are among the states with infections trending upward. 

The news comes in tandem with the company’s launch of a campaign running on TV, social media and in the app. It’s called “No mask. No ride” and depicts drivers and Uber Eats delivery people working during the pandemic. 

Coronavirus: COVID-19 drug remdesivir priced at $390 per vial for some patients, $520 for others

Uber also conducted a survey of 600 random Uber and Lyft drivers, finding that Uber drivers feel safer with COVID-19 related safety guidelines in place, the company said. The company added selfie technology for drivers in May that detects whether a driver is wearing a mask before they start a shift.

More than a million drivers have gone through mask detection already, the company said. Drivers have completed more than 100 million trips while wearing masks, a number that would be much higher if Uber Eats trips were included, the company said. 

It also sends notifications to riders reminding them to wear a face covering before their driver arrives. 

Uber’s business was hit hard after the pandemic was declared as people urged to stay home didn’t need to take as many rides. The company shed swaths of its workforce as a result, and CEO Dara Khosrowshahi waived his base salary through the end of the year. 

Even if you haven’t taken a trip in months, you’re still required to wear a mask. 

“For riders who may be taking their first trip since the pandemic began, please know that your driver is required to wear a mask or face cover – and you are too,” Uber said. 

Lyft also has a mask requirement in all 50 states, and airlines have instituted similar policies to aid in coronavirus prevention efforts. 

Follow Dalvin Brown on Twitter: @Dalvin_Brown. 

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Are Oil Bulls In For A Disappointing July – OilPrice.com

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Are Oil Bulls In For A Disappointing July? | OilPrice.com

Nick Cunningham

Nick Cunningham is an independent journalist, covering oil and gas, energy and environmental policy, and international politics. He is based in Portland, Oregon. 

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    The oil market continues to tighten, but the surge of coronavirus cases in the U.S. could derail the rally in crude prices.  OPEC+ can claim most of the credit for engineering an oil price rally, keeping upwards of 9.7 million barrels per day (mb/d) offline for several months. The one-month extension through July added to the effort, as did the improved compliance. “Although there is still the danger of demand outages in view of increased new cases of Covid-19, OPEC+ seems to have the market under control at the moment,” Commerzbank wrote in a note on Wednesday. 

    The resurgence of demand has also boosted prices, despite the fact that demand remains significantly impaired relative to pre-pandemic levels. A smaller oil market has “rebalanced” and might even trade at a deficit for the remainder of 2020. 

    But the coronavirus continues to spread like wildfire in the U.S., Brazil, and India. The U.S. posted 48,000 new Covid-19 cases on Tuesday, a record high. Dr. Anthony S. Fauci, the nation’s top infectious disease expert, warned that cases could top 100,000 per day if the current rate of infection is not slowed. 

    In the oil capital of Houston, ICU capacity is at 97 percent. Meanwhile, a total of 38 states now have an Rt value of over 1.0, meaning that each infected person is infecting more than one additional person – a sign that the spread is accelerating.

    At least 19 states have paused or rolled back their reopening plans. New economic data shows that the nascent rebound has stalled in much of the country, and is now going into reverse.

    Raymond James downplayed the significance of new closures in terms of its effect on the oil market, calling new shutdowns “geographically localized.” 

    In a global context, the trend is still broadly moving towards reopening, the bank said. “While it is understandable that these stories are played up by the media, the fact of the matter is that these occurrences are essentially noise against the overarching backdrop of re-opening that continues to advance, so far,” Raymond James analysts wrote in a note. The bank noted that of the 4.31 billion people that lived under some version of a lockdown in recent months, 3.56 billion are in areas that have now reopened, or 83 percent. 

    Related: Oil Rallies On Bullish EIA Inventory Data

    Others see more trouble ahead. Although the oil price rally has stalled at about $40 per barrel, “the downwards correction could justifiably have been greater” due to the renewed spike in Covid-19 cases in the U.S. and the potential negative impact on demand, Standard Chartered wrote in a report. 

    “[W]e remain wary of the sustainability of apparent increases in gasoline demand, as record-high new coronavirus cases in the top three gasoline-consuming US states (California, Texas and Florida) raise  demand risks, and are at odds with recent market commentary based on a V-shaped recovery,” Standard Chartered said. 

    “Record-high inventories, increasing risks to demand, and the potential rapid return of shut-in production suggest to us that price recovery has run far ahead of what data trends can support, and that the longer oil prices take to correct lower, the larger that correction will likely need to be,” the bank added.

    Standard Chartered also said that China’s strong oil import demand in recent weeks has less to do with a sharp recovery than it does with “bargain-hunting in crude oil after the collapse in prices.” Commodity markets are “unlikely to be powered by a V-shaped recovery in import demand from Asia ex-China.” 

    A few other negative factors are worth keeping an eye on. OPEC+ is leaning towards relaxing the production cuts at the end of the month, potentially returning 2 million barrels per day to the market. Although nothing has been decided, sources told Reuters that the production cuts could ease from 9.7 mb/d to 7.7 mb/d as soon as August. 

    Libya – which is not participating in the OPEC+ agreement – may also return some supply to the market. The bulk of the country’s output has been offline during the past year due to the civil war, but the failed siege on Tripoli by the Libyan National Army has led to negotiations and the potential restart of oil terminals. 

    Meanwhile, Saudi Arabia has threatened a new price war if Angola and Nigeria do not up their compliance with the production cuts, according to the Wall Street Journal.

    For now, though, oil traders are ignoring most of these bearish signals. The EIA reported a strong draw in crude inventories for the week ending on June 26, leading to price gains during midday trading on Wednesday. 

    The EIA data will likely lead crude benchmarks “to keep their gains,” and the enthusiasm could “stay for a while, with traders longing for the next bunch of positive news,” Rystad Energy’s oil markets analyst Louise Dickson said in a statement. However, Dickson noted a rather large caveat in the next sentence. 

    “Keep an eye on Covid-19 though and how reported infections increase in the US and beyond, that’s the Joker in the oil card deck,” the analyst said. 

    By Nick Cunningham of Oilprice.com

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      Scotiabank joins growing list of brands boycotting advertising on Facebook – CTV News

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      TORONTO —
      All five of Canada’s major bankshave joined the growing list of companies that have announced their intention to stop advertising on Facebook in July, because of the social media giant’s failure to stop the spread of hateful content.

      On Tuesday, Scotiabank confirmed their plans to temporarily pause advertising on Facebook platforms for the month of July, while RBC, CIBC, TD and BMO followed on Wednesday.

      “This decision was made based on our fundamental belief and practice in creating inclusive environments for our employees, customers, shareholders and communities,” a spokesperson for Scotiabank said in an emailed statement to CTVNews.ca.

      AJ Goodman, a spokesperson for RBC, said the bank “believes wide-spread, systemic racism has disadvantaged Black, Indigenous and People of Colour (BIPOC) by significantly impeding their ability to compete equally in opportunities for economic and social advancement.” He added RBC’s purpose is to “help clients thrive and communities prosper” and to achieve this they must work toward eliminating systemic racism and unconscious bias.

      “One way we can do that is by standing against misinformation and hate speech, which only make systemic racism more pervasive,” Goodman said in an emailed statement on Wednesday. “In response to recent events, effective July 1, RBC will pause all paid advertising on Facebook and Instagram for the month of July.”

      The banks are just the latest in a long list of international brands taking part in the boycott as part of the #StopHateForProfit campaign, which is being led by civil rights groups, including the Anti-Defamation League and the National Association for the Advancement of Colored People.

      The coalition of groups accused Facebook of repeatedly failing to “meaningfully address the vast proliferation of hate on its platforms” when it called on corporations earlier this month to boycott the platform for the month of July.

      Other Canadian companies that have joined the boycott include Lululemon Athletica, Mountain Equipment Co-op, Arc’teryx, and Moosehead Breweries.

      International brands taking part in the campaign include Coca-Cola, Ben & Jerry’s, Eddie Bauer, Hershey’s, Honda, and Patagonia.

      With files from The Canadian Press 

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