BEIJING–A private gauge of China’s service-sector activity surged to the highest level in more than a decade in June, as the easing of virus-control measures in most parts of the country drove demand.
The Caixin China services purchasing managers index rose to 58.4 in June from 55.0 in May, Caixin Media Co. and research firm Markit said Friday. The reading came in far above the 50 mark that separates expansion from contraction, signaling rapid month-on-month expansion.
June’s result was the highest since April 2010, when it stood at 58.5, according to financial-information provider Wind.
Total new business rose at the sharpest rate since August 2010, with service providers forecasting further increases in client demand in the coming months, according to Caixin.
Supply as well as domestic and overseas demand recovered as the coronavirus crisis remained largely under control in China, said Wang Zhe, a senior economist at Caixin Insight Group. Employment was still a key problem and it will take time for the economy to fully recover, the economist said.
Although supply and demand in services recovered, the subindex measuring the sector’s hiring stayed in negative territory for the fifth straight month in June as companies remained cautious about expanding hiring amid insufficient demand.
China’s official nonmanufacturing purchasing managers index, which covers services and construction, rose to a seven-month high of 54.4 in June from 53.6 in May, the National Bureau of Statistics said earlier this week.
The Caixin PMI is tilted more toward smaller companies while the official one is weighted more toward larger ones.
Ottawa announces deals with two international companies for COVID-19 vaccines – The Globe and Mail
Ottawa has struck deals with two international drug companies to purchase their candidate COVID-19 vaccines for distribution in Canada, federal officials said on Wednesday.
Details of the agreements reached with Moderna and Pfizer Inc., including the cost of the vaccines, have not been disclosed, but Public Service and Procurement Canada Minister Anita Anand said that millions of doses have been ordered from the two companies for delivery in 2021. She added similar arrangements were being sought with other suppliers, with options to increase orders based on need.
“We are working on all possible fronts and diversifying our vaccine supply chain,” Ms. Anand said.
Though the terms of each agreement vary, both vaccines will ultimately require Health Canada regulatory approval. This will depend, in part, on how they perform in clinical trials over the coming months.
During a news conference in Toronto, Ms. Anand said parallel efforts were under way to boost supplies of needles, syringes and alcohol swabs as part of “preparing Canada for mass vaccination” against COVID-19.
At the same briefing, Navdeep Bains, the Minister for Innovation, Science and Economic Development, said his department has formed a vaccine task force to provide the federal government with expert advice on which vaccines to prioritize for purchase on the global market and which Canadian-made vaccines to support with additional funding and production capacity to enable them to advance to clinical trials.
“Priority number one is to make sure that we have safe and effective vaccines for all Canadians,” Mr. Bains said. “Long term, we also want to build a strong industrial base for [Canada’s] life sciences sector.”
The widespread distribution of a successful vaccine is widely regard as the only viable solution to the COVID-19 pandemic.
Among the nearly 200 COVID-19 vaccines in development worldwide, about 30 have advanced to human testing. As of this week, six have now reached Phase 3 clinical trials designed to measure vaccine efficacy by administering doses to thousands or tens of thousands of individuals and tracking their rates of infection over time. Among the six are the two vaccines that Canada has so far arranged to purchase.
The vaccine developed by Moderna, a Massachusetts-based biotech company, yielded promising results in an early study published last month in the New England Journal of Medicine.
Pfizer’s vaccine was developed jointly with BioNTech, a company based in Germany. That partnership has already stuck similar deals to supply its vaccine to Japan, the United States and Britain.
BioNTech confirmed that part of the manufacturing of the Canadian order would take place in Canada.
The federal announcement also included $56-million for Ottawa company Variation Biotechnologies Inc. and $3-million for Nova Scotia based IMV Inc. to support clinical trials of two made-in-Canada vaccine candidates. Earlier this year the federal government provided funding to Medicago, a Quebec company that last month launched Canada’s first clinical COVID-19 vaccine trial.
As of Wednesday, 133 out of 180 volunteers have been injected with the Medicago vaccine as part of a Phase 1 trial, which is primarily a safety test of the vaccine.
The multiple investments are a reflection of a broader awareness that ultimately several vaccines could be needed to defeat the COVID-19 pandemic on a global scale, said Alex Romanovschi, medical director for GSK Canada, which has partnered with Medicago on its trial.
“At the end of the day … no one company will be able to cover the entire world,” Dr. Romanovschi said.
While several international vaccines are further ahead in testing than the leading Canadian candidates, experts have argued that Canada should complement its international purchases with efforts to accelerate vaccine development and production capacity at home at a time when it’s not clear which vaccines will ultimately work best.
Prioritizing among domestic vaccine projects, as well as potential international partnerships, is part of the mandate of the 12-member vaccine task force, which began its work in early June.
“We’re making investments that are needed now to be sure that something works out,” said Joanne Langley, a professor of pediatrics and community health and epidemiology at Dalhousie University in Halifax.
Mark Lievonen, a former president of Sanofi Pasteur Ltd. who is co-chairing the task force with Dr. Langley, said he is leading a subcommittee that is looking specifically at manufacturing challenges that vaccines makers will face in Canada.
Canadian participation in vaccine production could become crucial if international shipments are delayed at their country of origin because of demand at home or for other reasons.
A hint of the problems that can arise when relying on international sources is evident in the continued holdup of the delivery of a vaccine from CanSino Biologics – a Chinese company that has partnered with Canada’s National Research Council – for a clinical trial in Halifax. That trial was to have started two months ago but the vaccine has so far not been released by Chinese customs.
Mr. Bains declined to speculate on the cause of the delay but said the issue underscored the need to keep many options open.
Despite this outlook, not every COVID-19 vaccine candidate in Canada has managed to attract federal funding.
On Wednesday, Providence Therapeutics released results from preclincial tests of its mRNA vaccine candidate that is based on the same technology as the Moderna and Pfizer candidates. The company is now seeking support to move ahead with clinical trials.
Brad Sorenson, the company’s chief executive officer, said that the results show the vaccine has the potential to be as good or better than international competitors.
“The question is, does Canada want to be a buyer or a seller?” he said.
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Dollar wallows and stocks inch higher as stimulus eyed – Reuters
SINGAPORE/WASHINGTON (Reuters) – The dollar languished and just about everything else rose on Thursday, as markets took patchy U.S. economic data as a harbinger of ever more stimulus and brinkmanship on Capitol Hill as a sign that a deal on a new U.S. stimulus package is close.
FILE PHOTO: A money changer counts U.S. dollar banknotes at a currency exchange office in Diyarbakir, Turkey May 23, 2018. REUTERS/Sertac Kayar
Following Wall Street’s lead, MSCI’s broadest index of Asia-Pacific shares outside Japan extended the week’s rally by 0.3% to a fresh six-and-a-half-month high.
Japan’s Nikkei index was steady and Asian currencies were on the march, with the Australian dollar gaining to around 72 U.S. cents, and the Korean won and Malaysian ringgit touching their strongest since March.
S&P 500 futures firmed, oil rose and gold inched back toward a record high hit overnight.
“If it’s got a pulse, people will buy it now,” said Rob Carnell, Asia-Pacific head of research at ING in Singapore.
He said it was clear the global recovery is not a “V-shaped” rebound, but markets are focused almost completely on the help that fiscal and monetary policymakers are providing, even if the next U.S. government package is likely to reduce spending from current levels.
“Short of apocalyptic news, we are going to see these markets carrying on going up because central banks are printing and printing (money) and it simply has to go somewhere,” Carnell said.
Top congressional Democrats and White House officials appeared to harden their stances on the new coronavirus relief plan on Wednesday, with few hints of compromise or that an unemployment benefit as generous as $600 a week could continue.
But investors interpreted Senate Republican Roy Blunt’s remark that “if there’s not a deal by Friday, there won’t be a deal,” as a sign there would be a compromise.
Federal Reserve policymakers also encouraged lawmakers to provide more aid.
And in any case, plenty is on the way – with a modest selloff in the bond market after the U.S. Treasury flagged borrowing a gigantic $947 billion this quarter, about $270 billion more than it previously estimated.
The yield on benchmark 10-year U.S. government debt rose 3 basis points and was steady at 0.5445% on Thursday.
Positive sentiment on Wall Street was further bolstered by company earnings, with a surprise quarterly profit from Walt Disney Co and a slew of upbeat healthcare results.
The Nasdaq minted a new record peak and closing high while the S&P 500 was up 0.6% and is less than 2% below its record high hit in February.
In Asia, it was Singaporean bank DBS bringing some cheer, with a shallower-than-feared plunge in second-quarter profit, helping shares in Southeast Asia’s biggest lender gain.
Investors are watching a crucial Indian central bank meeting later on Thursday, with around two thirds of economists polled by Reuters expecting an easing in interest rates.
U.S. jobs data due at 1230 GMT provides the next read on the pace of hiring, while sterling also traded cautiously ahead of a Bank of England policy decision due at 0600 GMT.
No changes are expected but some traders are looking for a dovish tilt in language.
“There is still a bit of uncertainty around whether the Bank will eventually move the policy rate into negative territory,” said Rodrigo Catril, a senior FX strategist at National Australia Bank.
“Pricing expectations are at 0.05% (compared with a current rate at 0.1%), so some in the market are betting on a move.”
Sterling last sat 0.1% firmer at $1.3127 and other majors were steady – with the euro at $1.1871 and the yen at 105.55 per dollar.
In commodity markets, Brent crude inched back toward a five-month high touched overnight, rising 0.1% to $45.23 per barrel and U.S. crude was steady at $42.15 per barrel.
Reporting by Tom Westbrook in Singapore and Chris Prentice in Washington; Editing by Stephen Coates and Lincoln Feast.
Manulife earnings helped by Asia business weathering challenges – BNN
Manulife Financial Corp.’s Asian business — once the biggest earnings contributor for the Canadian life insurer — is showing resilience in the face of added challenges in the region.
The COVID-19 pandemic, social unrest in Hong Kong and new rules for corporate-owned life-insurance products in Japan have been working against Manulife’s Asian operations in recent months. Yet Manulife shrugged off those issues in its second quarter, as the Asia division returned to growth after a drop in profit in the previous period. Overall earnings at the Toronto-based company beat analysts’ estimates.
- Growth in Asia last year outperformed that of the Canadian and U.S. divisions. While that’s no longer the case, profit rose 3.8 per cent to C$489 million (US$369 million) in Asia in the quarter.
- A market rebound added US$12.3 trillion in stock market value globally between April and June, helping money managers around the world gain back some ground from a coronavirus-spurred slump earlier in the year. For Manulife’s wealth division, assets under management and administration totaled C$696.9 billion, compared with C$653.1 billion a year earlier. Global wealth and asset-management earnings fell 1.7 per cent to C$238 million.
- Manulife’s U.S. operations, through its John Hancock business, had been the largest contributor to earnings after Asia since the start of 2019. Core U.S. earnings rose 37 per cent to C$602 million, making it the biggest contributor to overall profit in the second quarter.
- Analysts including RBC Capital Markets’ Darko Mihelic predicted that credit losses would weigh on Manulife’s domestic earnings. Core earnings from Canada rose 9.6 per cent to C$342 million.
- Manulife’s stock has fallen 29 per cent this year, trailing the 17 per cent decline for the S&P/TSX Composite Financials Index.
Core earnings rose 7.5 per cent to C$1.56 billion, or 78 Canadian cents a share, beating the 62-cent average estimate of 14 analysts in a Bloomberg survey.
Net income totaled C$727 million, or 35 cents a share, compared with C$1.48 billion, or 73 cents, a year earlier.
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