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Canadian dollar rallies as central banks move on inflation



The Canadian dollar strengthened against its U.S. counterpart on Thursday as more central banks took steps to fight back against inflation and domestic data showed wholesale trade climbing in October.

World stocks marched back towards record highs as surging inflation saw Britain and Norway hike interest rates after the U.S. Federal Reserve accelerated its stimulus withdrawal.

On Wednesday, Bank of Canada Governor Tiff Macklem said that slack in Canada‘s economy caused by the coronavirus pandemic has substantially diminished, a key sign the central bank is set to begin hiking rates soon.

Canadian wholesale trade rose by 1.4% in October from September to a record high on an increase in sales in motor vehicles and motor vehicle parts and accessories, Statistics Canada said.

Separate data, from payroll services provider ADP, showed that Canada added 231,800 jobs in November, the biggest increase since March, led by a pick-up in hiring in the leisure and hospitality sector.

The Canadian dollar strengthened 0.4% to 1.2774 per greenback, or 78.28 U.S. cents, after trading in a range of 1.2764 to 1.2857.

On Wednesday, the loonie touched its weakest intraday level since Aug. 20 at 1.2936 before rebounding as stocks rallied following the Fed decision.

The price of oil, one of Canada‘s major exports, was supported on Thursday by record U.S. implied demand and falling crude stockpiles, even as the spread of the Omicron coronavirus variant threatens to put a brake on consumption globally.

U.S. crude futures climbed 1.2% to $71.75 a barrel, while Canadian government bond yields were lower across much of the curve.

The 10-year touched its lowest intraday level since Sept. 24 at 1.381% before recovering to 1.395%, down 1.7 basis points on the day.


(Reporting by Fergal Smith; Editing by Nick Zieminski)


'Throwaway economy' thwarting climate goals: report –



Researchers said national climate pledges to reduce emissions focus narrowly on fossil fuel use and ignore the mounting global a
Researchers said national climate pledges to reduce emissions focus narrowly on fossil fuel use and ignore the mounting global appetite for stuff.

Countries are neglecting the massive impact of the “throwaway” economy on planet-warming emissions, according to research published Wednesday that calculated more than half a trillion tonnes of virgin materials have been consumed since the 2015 Paris climate deal.

From clothing to food, planes to buildings, research by the organisation Circle Economy estimates that 70 percent of are linked to the manufacturing and use of products.

But in its on the state of the world’s use of materials, researchers said national climate pledges to reduce emissions focus narrowly on and ignore the mounting global appetite for stuff.

Matthew Fraser, head of research at Circle Economy, said the aimed to look beyond just fossil fuel use and the transition to green energy and ask about the emissions implications of using fewer resources.

“What if we reimagine our relationship with stuff, what would that bring us? Actually, it is quite significant,” he told AFP.

The report estimates that if the economy were more circular, reducing resource extraction and consumption by 28 percent, then the world could meet the Paris warming target of 1.5 degrees Celsius above pre-industrial levels.

But only a third of nations’ climate pledges mention the circular economy as part of their emissions goals, the report said.

It warns that humanity is consuming 70 percent more virgin materials than the world can safely replenish.

Economic ‘metabolism’

The analysis looks at global material flows based on national import and export figures and translates them into estimates of materials used—and reused.

It calculates annual resource use has grown from 89.8 billion tonnes in 2016 to more than 100 billion tonnes in 2019 and estimated it at 101.4 billion last year.

Circle Economy found that almost all of the materials extracted go to waste, with just 8.6 percent of materials recycled in 2020, what they call the circularity gap.

That is an even lower proportion than in 2018, when reused materials were 9.1 percent of the total, as the for more things surges.

“Even though we are getting more efficient with how we use materials—computers are getting smaller, cars are becoming lighter, recycling is getting better—these micro gains in efficiency just aren’t stacking up relative to the total increasing demand,” said Fraser.

The report identified a number of practices across sectors from food production to transportation that it said could help rein in the ever-expanding use of virgin materials.

Fraser said the model that enables people in richer countries to buy products from all over the world to be delivered within hours and days “will inevitably have to change”.

The report also weighed strategies like enabling electrical goods—which contain critical raw materials including gold, silver and cobalt—to be repaired, redesigning items to be easier to recycle, restricting single-use plastics and renting items like cars rather than buying them.

One sector it identified as having a significant opportunity to reduce its materials footprint was buildings and construction, where Fraser said current practices were far from sustainable.

He said would be needed occasionally to reconfigure the economic incentives that make reusing resources more expensive than using new ones—stressing that this should be seen as an integral part of efforts to curb global warming.

But Fraser said for now the issue remains a significant blind spot for governments, which he said do not pull together data of their countries’ materials footprint.

He added that people in the future may ask tougher questions about whether materials can be recycled before they are even used.

“Could we become more strict about the metabolism of our ? Just like you wouldn’t eat all the time,” he said.

“I think in the future that could become more and more prominent.”

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‘Throwaway economy’ thwarting climate goals: report (2022, January 19)
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Crypto VC Firm Inflection Launches $40M Fund to Build ‘Open Economy’ – CoinDesk



Limited partner investors in the Mercury Fund include Galaxy Digital, Digital Currency Group (CoinDesk’s parent company), Accolade Partners, Evanston Capital, Isomer, Hutt Capital, Multiple Capital, Presight Partners and Rockaway, as well as individual backers Marc Andreessen and Chris Dixon of Andreessen Horowitz and noted tech investors Bo Shao and Erik Voorhees, among others.

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Commodity-linked gains lift Toronto index



Canada’s main stock index rebounded on Wednesday from a selloff in the previous session as an uptick in commodity prices lifted shares of mining and energy companies.

At 9:38 a.m. ET (14:38 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 65.33 points, or 0.31%, at 21,339.9. It fell 1.2% on Tuesday, the most in seven weeks.

“Markets are trying to bounce back a bit, the gains are pretty small relative to yesterday’s selloff but it does look like they’re trying to stabilize at this point,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

The energy sector climbed 0.6%, tracking gains in oil prices after an outage on a pipeline from Iraq to Turkey increased concerns about an already tight supply outlook. [O/R]

The materials sector, which includes precious and base metals miners and fertilizer companies, added 1.5% as gold futures rose 0.4% to $1,819.7 an ounce.[GOL/]

Toronto-listed technology stocks added 1%, rebounding after their worst session in two weeks.

Rising U.S. and European bond yields, however, weighed on sentiment, with investors awaiting next week’s Federal Reserve policy meeting for more cues on the central bank’s plan to tame inflation.

Signs that the Fed could aggressively raise interest rates have hit the benchmark Canadian index this year, pausing a rally that helped it notch a gain of 22% in 2021.

Pressure has also been mounting on the Bank of Canada to tighten monetary policy, with data earlier in the day showing annual inflation accelerated to an over two-decade high of 4.8% in December.

“The headline number were in-line, the core inflation was higher than expected, so it just generally keeps pressure on the Bank of Canada to start raising interest rates this year sometime probably still sooner rather than later,” SIA Wealth Management’s Cieszynski said.

Among individual stocks, Barrick Gold Corp gained 2.3% after reporting a 10% sequential rise in fourth-quarter output.


(Reporting by Amal S in Bengaluru; Editing by Aditya Soni)

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