CHINA’S economy is not yet on secure footing, as recent green shoots have been offset by lingering fears about the property crisis and a stubborn inability to revive confidence.
Data due Wednesday (Oct 18) will likely show a modest pickup in quarter-on-quarter gross domestic product growth, though year-on-year comparisons may be less favourable.
The pace of expansion for July-September compared with a year ago probably slowed to 4.5 per cent, below Beijing’s annual growth target of about 5 per cent.
Earlier data for the quarter contained some promising figures that supported a steadying of economic activity, with factory activity improving and a drop in exports moderating as authorities rolled out stimulus and eased restrictive real estate policies. Releases in the coming week on industrial output, retail sales and unemployment are expected to show how widespread that stabilisation is.
The recovery remains uneven, though. Consumer prices returned to the brink of deflation in September, data on Friday showed. Home sales have also failed to mount a turnaround, which may weigh on investment and counter any support from stronger government-led infrastructure spending.
“The upcoming September activity data will be important to watch,” said Xiaojia Zhi, head of research at Credit Agricole CIB. While the figures “may also send the message that the Chinese economy could be showing more signs of stabilising, uncertainty remains related to the continued property drag”.
Questions also remain about how much additional stimulus China will roll out to support the economy. The People’s Bank of China on Monday will set the rate on its one-year medium-term lending facility, a key policy rate. Economists broadly expect that to remain unchanged for now, though several expect a cut before the end of 2023.
There may be other measures on the horizon as well. China is considering raising its budget deficit for the year by issuing more debt to spent on infrastructure, Bloomberg reported. Authorities are also mulling the formation of a state-backed stabilisation fund to shore up stock market confidence, while the nation’s sovereign wealth fund recently purchased the equivalent of about US$65 million worth of shares in the nation’s biggest banks.
Some economists still point to the need to address the biggest albatross of all: the real estate market.
“The Chinese government will still need to do more policy easing, especially related to property,” Zhi said. “There is still room to further relax or remove various policy restrictions in major cities.”
Elsewhere, a speech by the Federal Reserve chief and UK inflation and wage data will draw attention, while central banks in Indonesia and South Korea may keep interest rates unchanged.
US and Canada
Following data showing still-brisk inflation, investors will parse comments by Jerome Powell on whether the Fed is leaning towards another rate hike before year-end. The Fed chairman addresses the Economic Club of New York on Thursday – the headline event in a hectic week of speeches.
Regional Fed bank presidents Patrick Harker, Thomas Barkin, Neel Kashkari, Lorie Logan, Loretta Mester and Austan Goolsbee are slated to appear at various events. Fed governors Lisa Cook and Christopher Waller will also speak.
Among upcoming economic data, retail sales are expected to reveal subdued consumer demand as the third quarter drew to a close. The September value of purchases, unadjusted for price changes, is seen rising about half as much as in the previous month.
Tuesday’s release may also show a decline in so-called control group sales, the first such decrease in six months. These sales, which exclude receipts at food service establishments, auto dealers, building materials stores and gas stations, are used to calculate spending on most goods in the GDP report.
Another report in the coming week is expected to show the weakest annual rate of existing home sales since 2010 as the real estate market continues to suffer from high borrowing costs and limited inventory.
Housing starts, meanwhile, probably snapped back after plunging in August on a slump in multifamily home construction.
In Canada, among several reports due, a highlight will be inflation on Tuesday, which will show whether price gains of about 4 per cent on key measures have slowed further.
Asia
Away from China, the week starts with voters in New Zealand having opted for a new conservative government in Saturday’s general election.
Inflation figures out Tuesday will likely show that the cost-of-living crunch continues to weigh on households there, even as food-price growth is slowing.
Three Reserve Bank of Australia officials will speak in the coming week, with governor Michele Bullock continuing to flesh out the vision of her fledgling leadership on Wednesday. Jobs figures come out the following day.
Bank Indonesia is expected to hold rates steady on Thursday, as it is done since raising them in January. That is also likely the case for the Bank of Korea, even as inflation there heats up again.
Trade data from Indonesia, Malaysia and Japan is also released during the week.
Tokyo’s main event is likely to be Thursday’s unveiling of union pay demands for next year. Bank of Japan officials citing the need for strong wage gains will likely watch that announcement closely, alongside nationwide CPI figures on Friday.
Europe, Middle East, Africa
The UK will take centre stage for Europe. After numbers on Thursday showed that growth stayed weak in August, further releases will signal to Bank of England officials whether their recent pause in rate hiking is justified.
On Tuesday, wage data may point to weakening pressures in August, with accompanying labour-market numbers also probably showing a loss of momentum.
The following day, core inflation, which strips out volatile elements such as energy, as well as headline CPI, are anticipated to have fallen in September.
It is a quieter week in the eurozone. Germany’s ZEW gauge of investor confidence is released on Tuesday, while euro-area inflation data on Wednesday may confirm initial readings that showed weakening pressures.
For the European Central Bank, the first three days of the week will mark the end of a pre-decision window to speak out on monetary policy before officials meet on Oct 26. Central bank governors from France, Spain, the Netherlands and Germany are among those scheduled to deliver remarks.
ECB president Christine Lagarde will be in Luxembourg on Monday for a meeting of eurozone finance ministers that US Treasury Secretary Janet Yellen is also scheduled to attend.
Italian Finance Minister Giancarlo Giorgetti will be there as well, but only after he presents his budget law that incorporates the looser fiscal plans of Prime Minister Giorgia Meloni’s coalition. A sovereign rating assessment for Italy is due from Standard and Poor’s on Friday.
Turning north, several Riksbank officials are due to speak, including governor Erik Thedeen – remarks that may be closely watched after evidence of stubborn core inflation added to the case for another rate hike next month.
In the Middle East, Israel publishes data on Sunday that will probably show price increases did not accelerate last month after an upside surprise in August took inflation above 4 per cent.
The outlook is now in flux as the shock of Hamas attacks on Israel leads to a military escalation that is likely to scar the economy by hurting consumption, investment and tourism. The market no longer expects a rate hike from the Bank of Israel and is positioning instead for its first monetary easing since the pandemic. A decision is currently scheduled for Oct 23.
In Africa, data on Monday will likely show Nigeria’s inflation quickened for a ninth straight month, to over 27 per cent. That may see the central bank, under new leadership, raise borrowing costs at its next meeting.
On Tuesday, South Africa’s monetary officials will issue a review on domestic and international developments that affect their policy. Data the next day may show September’s inflation quickened from the 4.8 per cent reading seen in August, buoyed by transport.
A weaker rand, higher oil costs and an outbreak of avian flu could keep price gains elevated for some time. Forward-rate agreements starting in two months – used to speculate on borrowing costs – show traders are pricing in a 70 per cent chance of a quarter-point increase on Nov 23.
Latin America
Brazil GDP-proxy data published on Thursday are likely to show Latin America’s biggest economy expanded for a 22nd straight month in August, its longest run since President Luiz Inacio Lula da Silva’s second administration more than a decade ago.
Economists surveyed by the central bank have almost tripled their 2023 GDP forecast to 2.92 per cent since early May.
Data on Sunday showed that Peru’s economy shrank in August for a fourth month in a row, extending its recession as analysts begin to grapple with the possibility the economy may contract in full year 2023.
In Colombia, August’s GDP-proxy print should show an economy that is barely expanding. Economists surveyed by Bloomberg have trimmed their third-quarter output forecast to 0.7 per cent from 1 per cent.
Elsewhere, the central banks of Brazil and Colombia post surveys of economists, while Citibanamex publishes its bi-weekly survey of Mexican analysts.
The region’s two biggest economies report retail sales figures for August. In the two decades starting in 2000 Brazil’s results easily outpaced Mexico’s. But since the height of the pandemic that relationship has flipped: since January 2021, Mexico’s retail sales have been humming along at a year-on-year average of 9.6 per cent to Brazil’s sluggish 1.8 per cent pace. BLOOMBERG
VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.
Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.
The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.
“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.
“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”
Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.
The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.
The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.
Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.
More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.
Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.
“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.
Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.
“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.
Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.
Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.
Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”
“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.
This report by The Canadian Press was first published Sept. 18, 2024.
FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.
Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?
Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.
Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.
Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.
Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?
Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.
Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.
Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.
Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?
Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.
Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.
Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.
This report by The Canadian Press was first published Sept. 18, 2024.
ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.
The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.
He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.
The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.
Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”
The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.
Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.
This report by The Canadian Press was first published Sept. 18, 2024.
