© Reuters. FILE PHOTO: A view shows railroad freight car in Omsk
By Laila Kearney
NEW YORK (Reuters) – Oil futures were up on Thursday, supported by a drop in U.S. unemployment and a drawdown in crude inventories, but the spike in U.S. coronavirus infections fanned concerns that economic activity will weaken in coming weeks.
New COVID-19 cases in the United States rose by nearly 50,000 on Wednesday, according to a Reuters tally, the biggest one-day spike since the start of the pandemic.
Numerous states are advising citizens to restrict movements and closing bars and restaurants again, which is expected to hamper further job growth.
Brent crude () futures rose 69 cents, or 1.6%, to trade at $42.72 a barrel by 1:25 p.m. EDT (1725 GMT). U.S. West Texas Intermediate (WTI) crude () futures gained 49 cents, or 1.2%, to $40.31 a barrel.
“Prices definitely got a boost from the economic data, but I think the reason we’re not getting a more enthusiastic reaction to the upside is because of the concerns about the uptick of the virus,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
U.S. non-farm payrolls increased by 4.8 million in June, the Labor Department reported, beating expectations, even as permanent job losses rose. Traders said the data could lessen the desire in Washington for more federal support for the economy.
“The jobs report was good, but the flip side of that was that it was so good that it might inhibit a stimulus program,” said Bob Yawger, director of energy futures at Mizuho.
U.S. crude inventories fell 7.2 million barrels from a record high last week, far more than analysts had expected, U.S. Energy Information Administration data showed, as refiners ramped up production and imports eased. [EIA/S]
Gasoline stockpiles were higher, however, and the spike in cases in heavily populated U.S. Sun Belt states, among the country’s biggest consumers of gasoline, could hit fuel demand headed into the July 4 holiday weekend, often a busy period for road travel.
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Forex Today: The dollar’s remains the weakest – FXStreet
Here is what you need to know on Thursday, August 6:
Dollar’s sell-off continued. A poor ADP survey that showed that the private sector added just 167K new jobs in July added pressure on the American currency. The ISM Services PMI surprised to the upside, but investors ignored the headline as the employment sub-component was weak. Meanwhile, the US Congress continues to discuss the next aid package, without reaching an agreement just yet.
High-yielding EUR, GBP and AUD flirted with their recent multi-month highs on the back of dollar’s weakness, but there was no follow-through, easing just modestly ahead of Wall Street close.
Equities closed with gains, while government bond yields bounced a bit from their recent lows, preventing the USD/JPY pair from collapsing.
USD/CAD plunged in a mixture of encouraging Canadian data and rising oil prices, with WTI reaching $43.50 a barrel. The US EIA stockpiles report showed that stockpiles were down by 7.37 million in the week ended July 31.
Gold prices soared, hitting fresh all-time highs. Spot gold traded as high as $2055.69 a troy ounce.
The 'shop local' message is everywhere, but it's tough resisting deals during a pandemic – CBC.ca
Are you on board the shop local movement that’s rolling across Canada?
The encouragement to support neighbourhood businesses is coming from all quarters as the economy struggles to emerge from the financial devastation of the COVID-19 pandemic.
Whether it’s provincial and municipal initiatives, chambers of commerce programs, highly publicized incentive campaigns backed by financial giants, or small signs in front of individual businesses, the message is the same: Show your local entrepreneurs some extra love during these difficult times — it’s important for helping the economy recover.
While recent polls suggest most Canadians support the idea, actually getting people to prioritize shopping locally over scoring the best deal and the convenience of shopping online is a tough sell during a pandemic, some experts say.
Consumers lack confidence
The pandemic has left many people out of work and feeling insecure about their finances, which could make finding the lowest prices more important than supporting local small businesses.
The Bank of Canada’s most recent survey of consumer expectations showed that virtually all indicators have deteriorated due to the impact of the pandemic, including people’s expectations for wages, spending, labour market conditions, inflation and growth in house prices.
“Everybody is trying to find a deal because they don’t know how long their money is going to last,” said economist Armine Yalnizyan.
And maintaining low prices can be a challenge for small enterprises, she said.
“They have a hard time providing deep-cut bargains, especially now.”
Still, surveys done since the pandemic began suggest there is growing support for small businesses in this country. A key finding from a Leger poll conducted in April was that “Canadians say they are buying local products more often or for the first time.”
American Express Canada said 83 per cent of participants in an online poll in June agreed it was time to support the small business community, while 76 per cent said they were “determined to shop local more than in the past.” The poll wasn’t randomized, but a comparable random poll would have a margin of error of four percentage points, 19 times out of 20.
Who says they don’t support small businesses?
But Wayne Smith, a professor at Ryerson University’s Ted Rogers School of Management who specializes in consumer behaviour, says what people tell researchers can differ from how they actually behave in the real world.
“It’s kind of like asking if people like puppies,” he said. “Everyone’s going to say they like puppies. But how many people go out and get a puppy?”
Smith compares the shop local phenomenon to consumers committing to shop at stores that specialize in environmentally friendly, sustainable products.
“Some do it, but it’s a relatively small proportion of the population,” he said. “Otherwise, Walmart would be out of business.”
Buying decisions are based on “perceived value,” Smith said. Locally sourced goods or services must be of equal or greater quality than those found elsewhere if consumers are going to follow through on their good intentions, he said.
Julia Gray of Toronto said she and her family are happy to shop locally as much as possible and support small businesses instead of large corporate chains.
However, as an artist, she is also very value conscious, she said.
“My income is always a bit in flux, so, as a family, we’ve learned to be careful about our spending.”
Even so, the pandemic inspired her to make a more concerted effort to support her neighbouring businesses, she said.
“Instead of ordering from Pizza Pizza or some other corporate pizza place, let’s order from the local place where their kids go to school with our kids,” she said. “These places won’t survive if we don’t help them.”
Amazon sales booming
Gray says small businesses can also be preferable from a health perspective.
“We have folks in our family who are immunocompromised,” she said. “We don’t want to go where there are big groups and you can be more exposed to the virus. Smaller shops don’t have as many people in them.”
She avoids shopping at Amazon, she said, because it’s one way to express her values.
“You can vote, and you can decide where to spend your money,” she said. “We think about workers — are they treated fairly? Are they protected? And in whose hands does our money end up?”
But Lonnie Delisle, a choir director in Vancouver, is a fan of Amazon.
“It’s so convenient. The price point is good, the selection is good,” he said. “The ease at which you can find things and make the purchases. Amazon is exceedingly user-friendly.”
Delisle said he tries to shop with Canadian companies as much as possible, often checking the Bay or Canadian Tire first.
“But when you need something, and [Amazon has] what’s available, that’s where we go.”
Amazon has thrived during the pandemic, with sales jumping 40 per cent compared to the same time last year. Revenue from international markets such as Canada has also surged due to increased demand.
Big businesses offer incentives for shopping locally
However, even some very big businesses in Canada are trying to get the message out about the importance of small businesses.
The Royal Bank and American Express Canada are both spending big bucks on multimedia advertising campaigns to encourage consumers to shop locally, and offering financial incentives to customers who support small businesses.
RBC’s Canada United campaign offers customers extra points on their RBC Rewards card by shopping locally.
The bank also produced a video about the importance of small businesses and will donate five cents to a special fund every time someone views the video, or likes or shares it on social media. Entrepreneurs will then be able to apply to the fund for grants up to $5,000 to help them cover costs associated with keeping their business afloat through the pandemic.
American Express Canada’s Shop Small initiative gives cardholders $5 in credits when they spend at least $10 at up to 10 different small businesses, to earn a maximum of $50 in free money. The company has also created a Shop Small Map to direct shoppers to eligible stores.
“It’s good for our economy,” said Kerri-Ann Santaguida, vice-president and general manager of merchant services for American Express Canada. “It’s about the vibrancy of neighbourhoods across the country.”
Economist Armine Yalnizyan said the strategies of American Express Canada and RBC are similar to that of the federal government, with its rent relief program and small business loans, because they recognize that businesses are the engine that will pull Canada’s economy through the crisis.
“We can’t have resilient communities without resilient small businesses,” said Yalnizyan, who holds a fellowship on the future of jobs from the Atkinson Foundation, a Toronto-based charitable organization focused on social and economic justice.
The fact is, she said, big financial institutions such as RBC and American Express Canada depend on a healthy economy.
“They’re trying to keep as many businesses afloat as possible,” she said, “which will minimize the increase in permanent layoffs.”
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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