(Bloomberg) — The world economy is approaching the northern hemisphere winter in disarray, unable to shake off the coronavirus crisis amid persisting supply disruptions, soaring prices and resurgent outbreaks.
Global surveys of purchasing managers this week are likely to point that way. Among the outcomes anticipated by economists are slowing manufacturing and services activity throughout the euro zone and the U.K., and only modest improvement in the U.S.
With parts of Europe confronting renewed restrictions to contain another wave of the virus, China’s rebound fading and rising infections taking hold in America too, much of the global economy is now staring at the threat of a second northern winter of woe, compounded by a cost-of-living squeeze amid surging gas prices and supply bottlenecks.
Europe is at the sharper end of the advanced-world wedge. Record infections in Germany might push authorities to announce new lockdowns, and Austria has already done just that. The continent as a whole is enduring a painful peak in consumer prices.
In the U.S., meanwhile, former Treasury Secretary Lawrence Summers said he sees no more than a 15% chance that “it’s all going to work out well,” with the probabilities much greater for either stubbornly high inflation or a slump in growth.
The extent to which such outcomes play out will inform monetary policy deliberations on the speed of stimulus withdrawal across the Group of Seven, culminating in a grand finale of decisions in mid-December. That’s when central banks, including the U.S. Federal Reserve, hold their final meetings of the year.
What Bloomberg Economics Says:
“Much of Europe is retreating again in the face of a fourth wave of Covid-19, and survey data next week should give some early clues about the economic impact of rising infection rates.”
–For full analysis, click here
Elsewhere this week, monetary officials in New Zealand and South Korea may raise interest rates, and minutes of the most recent meetings of the Fed and the European Central Bank will be released.
Click here for what happened last week and below is our wrap of what’s coming up in the global economy.
U.S.
A pre-holiday feast of economic data and a possible announcement on President Joe Biden’s choice to lead the Federal Reserve will be laid out for investors over the coming week.
The government’s report on personal income and spending, which includes an inflation measure tracked by the Fed, will be the main course on data-heavy Wednesday before markets close the following day for Thanksgiving.
Other releases on Wednesday include durable goods orders, revised third-quarter economic growth, new-home sales, merchandise trade, and a final read on consumer sentiment. Existing home purchase data and surveys on November manufacturing and services will surface earlier in the week.
Also on Wednesday, the Fed will release minutes of its early-November policy meeting in which the U.S. central bank announced it would start reducing asset purchases.
Meantime, the White House says Biden will announce whether he’ll renominate Jerome Powell to a second term as chair of the central bank, or opt for Fed Governor Lael Brainard instead.
For more, read Bloomberg Economics’ full Week Ahead for the U.S.
Asia
The Reserve Bank of New Zealand and the Bank of Korea are both expected to raise interest rates for the second time since the pandemic as they lead the pack in Asia taking action to step back from full-throttle stimulus and get ahead of the curve in stemming any inflation risks.
Preliminary South Korean trade figures should back up the case for a hike even if they show signs of stabilizing from stellar year-on-year gains.
Reserve Bank of Australia officials will be speaking on panels and may shed some light on how strongly the central bank will stick with its back-of-the-rate-hike-pack stance.
Tokyo inflation figures at the end of the week will show if Japan is seeing more signs of a pickup in prices as energy costs soar. China sets its loan prime rate on Monday and Sri Lanka sets rates on Thursday.
For more, read Bloomberg Economics’ full Week Ahead for Asia
Europe, Middle East, Africa
With more than two weeks left before ECB officials enter the quiet period before their all-important decision on the future of stimulus, comments from several of them may rivet investors. President Christine Lagarde will be among the policy makers speaking.
The ECB will also release an account of its previous meeting in October, when Lagarde and colleagues struggled to convince financial markets that bets on an interest-rate hike in 2022 to tame inflation were probably misplaced.
Aside from the monthly purchasing manager survey results due across the continent, Germany’s Ifo index on Wednesday will provide another snapshot of Europe’s biggest economy — just as it reels from ongoing supply interruptions, new infections, and a political system in flux amid continued coalition negotiations.
The Bank of England’s decision in December looks laden with suspense on whether policy makers will raise interest rates. Public remarks in the coming week by Governor Andrew Bailey and a couple of colleagues might therefore attract attention.
Sweden’s central bank will make its final monetary decision of the year on Thursday. With the Riksbank expected to keep its interest rate unchanged at zero for some time, the focus is likely to be on whether it will signal a hike by the end of 2024.
Further afield, Israel is expected to keep borrowing costs on hold on Monday due to strong growth and slowing inflation, driven in large part by the shekel.
In Russia, weekly inflation on Wednesday will be watched closely for any clues on whether price pressures are beginning to ease, as many economists have forecast.
Policy makers in Ghana are expected to leave interest rates on hold on Monday, after inflation accelerated to a 15-month high in October. Nigeria’s central bank is also expected to stand pat on Tuesday, as inflation moderates and after economic growth slowed in the third quarter.
For more, read Bloomberg Economics’ full Week Ahead for EMEA
Latin America
Argentina’s budget balance data due Monday should underscore the challenge of putting its debt back on a path to sustainability. Falling case numbers in Mexico have seen same-store sales rebound, a likely harbinger of stronger September retail sales readings out Tuesday.
Economic activity in Argentina has been surprising analysts to the upside since mid-year, and has returned to its pre-pandemic level. Analysts see additional growth in the September figures.
Look for Brazil’s mid-month consumer price data out Thursday to push higher from mid-October’s 10.34% print. Yet after a sustained rise since May 2020, some deceleration is seen ahead: Economists surveyed by the central bank see year-end inflation at 9.77%, while the central bank puts it at 9.5%.
In Mexico, final third-quarter output data is expected, with all indications still pointing to a solid 2021 rebound. Economists see mid-month inflation rising sharply, consistent with Banxico Deputy Governor Jonathan Heath’s view that it may hit 7.3% by year-end.
Lastly, Banxico posts the minutes of its Nov. 11 meeting where it hiked the key rate a quarter-point for a fourth straight time to 5%.
For more, read Bloomberg Economics’ full Week Ahead for Latin America
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
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.
