The immediate panic around bank runs in the United States may have eased, but the flood of deposits that have exited regional banks over the past year has prompted a tightening of lending standards and raised the odds that the U.S. economy will tip into recession.

For now, at least, that cycle is much less of a concern in Canada.

As of March, overall deposits at U.S. banks shrank 2.4 per cent from the previous year, the steepest decline since the country’s savings and loan crisis in the 1990s.

When regional U.S. banks are drained of deposits by households and businesses worried about the safety of their money or seeking higher interest elsewhere, those banks make fewer loans to buy houses and fund small business. That, in turn, can lead to a credit crunch and recession.

The picture in Canada is different, with deposits continuing to rise, as Stephen Brown at Capital Economics noted this week.

While lending to businesses has tightened significantly in the U.S., he wrote, on balance Canadian banks have made loans only marginally more restrictive.

Canada’s banking sector “does not face the same immediate risks as in the U.S., since it is far more concentrated, limiting the chance that problems at small lenders will trigger a broader crisis of confidence,” he wrote.

Still, he warned, “indirect risks” from international bank problems will likely lead Canadian banks to be more cautious in their lending here, “particularly as their U.S. operations come under strain.”

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(Bloomberg) — US equity futures edged higher after a key measure of US inflation stepped down last month by more than expected, and consumer spending stabilized, suggesting the Federal Reserve may be close to the end of its rate-hiking campaign. The dollar pared an advance.

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Excluding food and energy, the Fed’s preferred inflation gauge — the personal consumption expenditures price index — rose 0.3% in February, slightly below the median estimate of 0.4% in a Bloomberg survey of economists. The overall PCE climbed by the same amount, Commerce Department data showed Friday.

Contracts on the S&P 500 rose 0.2%, while those on the tech-heavy Nasdaq 100 were little changed, with the underlying index set for its strongest March since 2010.

Digital World Acquisition Corp., the blank-check firm taking Donald Trump’s media company public, rallied in premarket trading after he became the first former president to be indicted. Other Trump-linked stocks also gained.

If equities “end the week in the green, that’s a big deal considering how almost disastrous the rest of the month was,” said Craig Erlam, a senior market analyst at Oanda. “Confidence is easily shattered and difficult to restore and a positive end to the week would send a strong signal that investors are feeling reassured by the lack of turmoil recently.”

Treasury yields drifted following Friday’s US data at the end of a quarter of wild swings. Investors have struggled to adjust for banking collapses and the shifting outlook for interest rates amid high inflation and threats to economic growth. The two-year yield was around 4.11% Friday while the 10-year maturity was about 3.53%.

Traders remained on guard for any choppiness amid quarter-end rebalancing from pension funds and options hedging activity. And they continue to debate the extent to which policy makers may cut interest rates this year. Several strategists have said markets are wrong to expect easing by the Fed this year as the labor market remains robust, though US unemployment claims ticked up for the first time in three weeks.

A round of Fed speakers on Thursday suggested more monetary tightening was necessary to quell inflation, even after the collapse of three US banks this month. Boston Fed President Susan Collins said tightening was needed, while Richmond Fed President Thomas Barkin said the Fed can raise rates more if inflation risks persist.

In Europe, euro-area inflation plunged by the most on record, but a new high for underlying price gains highlighted the tricky task facing the European Central Bank as it decides how far to lift interest rates. Consumer prices rose 6.9% from a year ago in March — down from 8.5% in February and less than the 7.1% median estimate of economists, but core inflation quickened to 5.7%.

Elsewhere in markets, oil headed for a weekly surge of more than 7% amid ongoing disruption to Iraqi exports. Gold was little changed. And Bitcoin was set to end its best quarter since March 2021 with a gain of about 70%.

Key events this week:

• ECB President Christine Lagarde speaks, Friday
• New York Fed President John Williams speaks, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.2% as of 8:49 a.m. New York time
• Nasdaq 100 futures were little changed
• Futures on the Dow Jones Industrial Average rose 0.3%
• The Stoxx Europe 600 rose 0.5%
• The MSCI World index rose 0.7%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.2% to $1.0882
• The British pound was little changed at $1.2381
• The Japanese yen fell 0.2% to 132.95 per dollar

Cryptocurrencies

• Bitcoin fell 0.3% to $28,060.63
• Ether rose 0.5% to $1,804.69

Bonds

• The yield on 10-year Treasuries declined two basis points to 3.53%
• Germany’s 10-year yield declined four basis points to 2.33%
• Britain’s 10-year yield advanced one basis point to 3.53%

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The federal government has approved the multi-billion-dollar merger of telecom companies Rogers and Shaw, but with conditions that Ottawa insists will make the deal good for consumers.

François-Philippe Champagne, minister of Innovation, Science and Industry, said at a press conference Friday that the government has approved the transaction first proposed in 2021.

As part of the deal, Shaw’s wireless business, Freedom Mobile, will be sold to Quebec-based Videotron.

The approval comes with 21 conditions that the government says are “legally enforceable,” including that Videotron will start to offer plans that are comparable to those currently available in Quebec, and they can’t sell the wireless assets to anyone else for at least a decade.

Videotron must also:

• Offer 5G service everywhere Freedom currently operates within two years;
• Offer service in Manitoba via MVNO;
• Increase the data allotments for existing Freedom customers by 10 per cent.

“Today, I am informing Canadians that I have secured on their behalf unprecedented and legally binding commitments from Rogers and Videotron. And, after imposing strict conditions, the spectrum licences of Freedom Mobile will be transferred to Videotron,” Champagne said.

“This transfer follows a series of agreements signed by the parties that will ensure that this new national fourth player will be in it for the long haul, be able to go toe to toe with the Big Three, and actually drive down prices across Canada.”

While Shaw’s mobile business and its more than two million wireless customers will move to Quebecor, Rogers will take over Shaw’s media and cable assets, most of which are in Western Canada. But Champagne says those assets are also subject to numerous conditions.

They include a requirement to create 3,000 jobs in Western Canada, to spend billions to expand its broadband and wireless networks, and also offer new lower cost plans to consumers in both.

“Should the parties fail to live up to any of their commitments, our government will use every means in our power to enforce the terms on behalf of Canadians,” Champagne said, noting that Rogers is subject to financial penalties of up to $1 billion for non-compliance.

Champagne pitched the deal as a win for consumers, but consumer watchdog group OpenMedia called the news “a dark day for the Internet in Canada.”

“Today’s decision is the largest blow to telecommunications competition and affordability we’ve ever seen,” executive director Laura Tribe said after the news came out.

The approval by government is the final step in a lengthy process that started 746 days ago, when Toronto-based Rogers first proposed to take over Calgary-based Shaw in a deal worth $26 billion.

The deal faced intense opposition from the start, and numerous regulatory agencies weighed in. The Canadian Radio-television and Telecommunications Commission signed off on the broadcasting part of the deal last year, but Canada’s Competition Bureau fought hard against the deal, but ultimately lost in a tribunal ruling last year.

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