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Real-economy stirrings show U.S. leaves Europe in the dust – The Journal Pioneer

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By Leigh Thomas and Howard Schneider

PARIS/WASHINGTON (Reuters) – Real-time data on everything from sit-down restaurant meals to job hirings shows American business and consumers leaping to take advantage of a fast vaccine rollout even as their European counterparts languish in extended lockdowns.

And while some U.S. health experts express concern at the loosening or outright dropping of COVID-19 restrictions by many states, the outcome for now is that it is widening the U.S. head start in the post-pandemic recovery.

Even after an uptick this month for the first time since January, new U.S. infections at 131 per 100,000 over seven days are lower than those in Germany, France and Italy, the top three euro economies, the Reuters COVID-19 Global Tracker shows.

(https://graphics.reuters.com/world-coronavirus-tracker-and-maps)

Coupled with a faster vaccine rollout than any in Europe aside from Britain’s, that has prompted a tangible return of activity across a U.S. economy already forecast by the International Monetary Fund to return to pre-pandemic health months before the euro area can.

Take restaurants and retail. Diner visits recorded on the OpenTable State of the Industry site show, unsurprisingly, that numbers have continued to flat-line in Germany since late 2020 when lockdown measures were introduced.

In the United States, meanwhile, the chart has regained its habitual pattern of weekend spikes as the overall curve inches closer to its pre-pandemic level. (Graphic: Restaurants still closed in Europe as US recovers Restaurants still closed in Europe as US recovers, https://graphics.reuters.com/EUROPE-US/ECONOMY/xlbpgxymyvq/chart.png)

Google Mobility read-outs on movement trends confirm the same picture for retail as a whole. U.S. mobility levels leapt in January and broke further away from European comparisons in mid-February as Italy and then Germany and France saw declines. (Graphic: Google mobility trends for retail outlet, https://graphics.reuters.com/EUROZONE-USA/DIVERGENCE/dgkvleexkpb/chart.png) (Graphic: U.S. air travel is resuming, https://graphics.reuters.com/USA-ECONOMY/TRAVEL/dgkvlezdopb/chart.png)

While many European countries still have stringent travel restrictions in place – and some are considering additional ones – the number of U.S. air passengers screened topped 1.5 million this month for the first time in a year.

With some states open for leisure travel despite federal guidance to the contrary, U.S. airline executives see concrete signs of a domestic leisure travel recovery and are optimistic about the summer season.

The buoyant mood is reflected in job postings recorded on the Indeed website, with the U.S. tally having now since January pushed strongly past its February 2020 level while those in France and Germany remain below it.

Finally, a similar disconnect is seen in the composite weekly tracker compiled by the OECD think tank from Google search behaviour in areas such as consumption, labour markets, housing, trade, industrial activity and economic uncertainty. (Graphic: OECD weekly economic activity tracker, https://graphics.reuters.com/EUROZONE-USA/DIVERGENCE/jznpnggeavl/chart.png)

Such snapshots of economic behaviour must be interpreted carefully. OECD economist Nicolas Woloszko noted for example that drops in mobility over the past two to three months were having smaller effects on activity as firms and households adapted to the new conditions.

Yet the overall picture, combined with faster U.S. vaccine rollout and new Biden administration stimulus of $1.9 trillion, is already enough for many forecasters to start pencilling in a widening of the growth gap between the United States and the euro zone in the first three months of this year. (Graphic: U.S. bank deposits have soared on stimulus payments, https://graphics.reuters.com/EUROZONE-USA/DIVERGENCE/xlbpgxxwrvq/chart.png)

Already, the Federal Reserve’s projection of a 6.5% growth rate for the United States in 2021 compares with a mere 3.7% forecast for the European economy.

Worse, economists such as Gilles Moec at AXA Group see the euro area battling with further restrictions in the second quarter too until vaccine campaigns start to accelerate and cap new infections as promised by European Union officials.

“What is in balance is the fate of the third quarter, since at the current pace of vaccination reaching collective immunity by the summer definitely is a challenge,” Moec noted.

(Reporting by Leigh Thomas in Paris and Howard Schneider in Washington; Additional reporting by Dan Burns; Writing by Mark John; Editing by Matthew Lewis)

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Economy

CANADA STOCKS – TSX ends flat at 19,228.03

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* The Toronto Stock Exchange’s TSX falls 0.00 percent to 19,228.03

* Leading the index were Corus Entertainment Inc <CJRb.TO​>, up 7.0%, Methanex Corp​, up 6.4%, and Canaccord Genuity Group Inc​, higher by 5.5%.

* Lagging shares were Denison Mines Corp​​, down 7.0%, Trillium Therapeutics Inc​, down 7.0%, and Nexgen Energy Ltd​, lower by 5.7%.

* On the TSX 93 issues rose and 128 fell as a 0.7-to-1 ratio favored decliners. There were 26 new highs and no new lows, with total volume of 183.7 million shares.

* The most heavily traded shares by volume were Toronto-dominion Bank, Nutrien Ltd and Organigram Holdings Inc.

* The TSX’s energy group fell 1.61 points, or 1.4%, while the financials sector climbed 0.67 points, or 0.2%.

* West Texas Intermediate crude futures fell 0.44%, or $0.26, to $59.34 a barrel. Brent crude  fell 0.24%, or $0.15, to $63.05 [O/R]

* The TSX is up 10.3% for the year.

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Canadian dollar outshines G10 peers, boosted by jobs surge

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Canadian dollar

By Fergal Smith

TORONTO (Reuters) – The Canadian dollar advanced against its broadly stronger U.S. counterpart on Friday as data showing the economy added far more jobs than expected in March offset lower oil prices, with the loonie also gaining for the week.

Canada added 303,100 jobs in March, triple analyst expectations, driven by the recovery across sectors hit by shutdowns in December and January to curb the new coronavirus.

“The Canadian economy keeps beating expectations,” said Michael Goshko, corporate risk manager at Western Union Business Solutions. “It seems like the economy is adapting to these closures and restrictions.”

Stronger-than-expected economic growth could pull forward the timing of the first interest rate hike by the Bank of Canada, Goshko said.

The central bank has signaled that its benchmark rate will stay at a record low of 0.25% until 2023. It is due to update its economic forecasts on April 21, when some analysts expect it to cut bond purchases.

The Canadian dollar was trading 0.3% higher at 1.2530 to the greenback, or 79.81 U.S. cents, the biggest gain among G10 currencies. For the week, it was also up 0.3%.

Still, speculators have cut their bullish bets on the Canadian dollar to the lowest since December, data from the U.S. Commodity Futures Trading Commission showed. As of April 6, net long positions had fallen to 2,690 contracts from 6,518 in the prior week.

The price of oil, one of Canada‘s major exports, was pressured by rising supplies from major producers. U.S. crude prices settled 0.5% lower at $59.32 a barrel, while the U.S. dollar gained ground against a basket of major currencies, supported by higher U.S. Treasury yields.

Canadian government bond yields also climbed and the curve steepened, with the 10-year up 4.1 basis points at 1.502%.

 

(Reporting by Fergal Smith; Editing by Andrea Ricci)

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Canadian dollar rebounds from one-week low ahead of jobs data

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Canadian dollar

By Fergal Smith

TORONTO (Reuters) -The Canadian dollar strengthened against its U.S. counterpart on Thursday, recovering from a one-week low the day before, as the level of oil prices bolstered the medium-term outlook for the currency and ahead of domestic jobs data on Friday.

The Canadian dollar was trading 0.4% higher at 1.2560 to the greenback, or 79.62 U.S. cents. On Wednesday, it touched its weakest intraday level since March 31 at 1.2634.

“We have seen partial retracement from the decline over the last couple of days,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets.

“With oil prices where they are – let’s call WCS still at roughly $49 a barrel – I still think CAD has room to strengthen over the medium term and even over a one-week horizon.”

Western Canadian Select (WCS), the heavy blend of oil that Canada produces, trades at a discount to the U.S. benchmark. U.S. crude futures settled 0.3% lower at $59.60 a barrel, but were up nearly 80% since last November.

The S&P 500 closed at a record high as Treasury yields fell following softer-than-anticipated labor market data, while the U.S. dollar fell to a two-week low against a basket of major currencies.

Canada‘s employment report for March, due on Friday, could offer clues on the Bank of Canada‘s policy outlook. The central bank has become more upbeat about prospects for economic growth, while some strategists expect it to cut bond purchases at its next interest rate announcement on April 21.

On a more cautious note for the economy, Ontario, Canada‘s most populous province, initiated a four-week stay-at-home order as it battles a third wave of the COVID-19 pandemic.

Canadian government bond yields were lower across a flatter curve in sympathy with U.S. Treasuries. The 10-year fell 3.3 basis points to 1.469%.

(Reporting by Fergal Smith;Editing by Alison Williams and Jonathan Oatis)

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