Dale Smith

UPDATE 2-Bank of Canada sees longer 'detour' for economy, growth up later in year

Mar 07 2019

OTTAWA, March 7 Canada's economy may be in for a longer "detour" than first thought on weak consumer spending and business investment, but economic growth is set to pick up later in 2019, a deputy governor of the Bank of Canada said on Thursday.

Bankrupt oil firms must clean up inactive wells: Canada court

Jan 31 2019

OTTAWA/WINNIPEG Canada’s Supreme Court ruled on Thursday that bankrupt oil companies must clean up inactive wells, overturning lower court decisions that prioritized paying creditors and potentially raising the risks of investment in the industry.

WRAPUP 1-Canadian factory sales slump, adding to evidence of slower growth

Jan 22 2019

(New throughout) By Fergal Smith and Dale Smith TORONTO/OTTAWA, Jan 22 Canadian factory sales and wholesale trade both slumped more than expected in November, supporting the Bank of Canada's gloomy short-term forecasts for the economy which have sidelined prospects of further interest rate hikes over the coming months. The central bank has said that low oil prices, which have led to production cuts in Alberta, and a weak housing market will harm the economy in the fourth quarter of 2018 and the first quarter of this year. The price of oil, one of Canada's major exports, plunged as much as 45 percent between October and December before paring some of its decline in recent weeks. "Manufacturing and wholesales confirm the well-anticipated oil hit to Canada's economy in Q4," said Ryan Brecht, a senior economist at Action Economics. Brecht expects GDP to decline 0.1 percent in November and for fourth-quarter growth to slow to 1.2 percent annualized, slightly less than the 1.3 percent that the Bank of Canada has forecast. Canadian factory sales were down 1.4 percent in November from October on lower petroleum and coal product sales, Statistics Canada said. Analysts had forecast a decrease of 0.9 percent. "The release confirms the moderating growth narrative, one that has been reinforced by other disappointing releases, including the recent international trade data and today's wholesale trade data," Omar Abdelrahman, an economist at Toronto-Dominion Bank, said in a research note. Separate data from Statistics Canada showed that Canadian wholesale trade decreased by 1.0 percent in November from October, as weaker sales in the machinery, equipment and supplies subsector led the decline. Analysts had forecast no change. Earlier this month, data showed that Canada's trade deficit widened in November to C$2.06 billion ($1.54 billion), as both imports and exports fell. Still, some impediments to Canada's economy, such as oil production cuts, could prove temporary. "As these shocks fade, manufacturing sales should receive support from strong economic performance south of the border, a weaker loonie, and expectations of increases in investment spending in the face of elevated capacity constraints," Abdelrahman said. The Canadian dollar weakened on Tuesday to its lowest intraday level in more than two weeks at 1.3354 to the greenback, pressured by the weaker-than-expected data and investor worries about the outlook for the global economy. ($1 = 1.3334 Canadian dollars) (Reporting by Dale Smith in Ottawa and Fergal Smith in Toronto; Editing by Andrea Ricci)

WRAPUP 2-Canada inflation rate jumps in Dec but central bank seen on rate hold

Jan 18 2019

(Adds details on Canada's bond market) By Fergal Smith and Dale Smith TORONTO/OTTAWA, Jan 18 Canada's annual inflation rate climbed in December, matching the Bank of Canada's 2 percent target, but stable underlying price pressures were set to forestall additional interest rate hikes over the coming months as lower oil prices hurt the economy. Economists said the impact on the index of a 22 percent jump in airfares will be temporary and that the Bank of Canada, which has hiked interest rates five times since July 2017, will pay more attention to its three measures of core inflation. They were stable and held below the central bank's target. "There is no urgency whatsoever for the bank to move," said Doug Porter, chief economist at BMO Capital Markets. "We've been looking for two rate hikes later this year, and I stress the word 'later.' We've got them going in July and December." Last week, the Bank of Canada held rates steady at 1.75 percent, as expected, but said more increases would be necessary even though low oil prices and a weak housing market will harm the economy in the short term. Canada is a major exporter of oil, which has fallen as much as 45 percent since October. The Canadian economy is clawing its way through a soft patch, which will delay the next interest rate hike until at least April, according to economists polled by Reuters. The chances of another rate hike by April held at less than 20 percent after the inflation data, the overnight index swaps market indicated. Canada's annual inflation rate rose to 2.0 percent from 1.7 percent in November as rising air transportation and telephone service costs offset lower energy prices, Statistics Canada said on Friday. The median prediction of analysts was for annual inflation of 1.7 percent. "I wouldn't read too much into it," said Andrew Kelvin, senior rates strategist at TD Securities. "There was a big boost from air travel again, so that's something we would expect to unwind in the coming months. What's more important is that the core inflation metrics were stable and we did have a bit of a downward revision to the median core CPI metric." The CPI-median was unchanged at 1.8 percent after a downward revision in November, which had previously been 1.9 percent. The Bank of Canada's two other preferred measures of core inflation, CPI-common and CPI-trim, were stable at 1.9 percent. The Canadian dollar got a small boost from the data, climbing to a session high of 1.3232 to the greenback, or 75.57 U.S. cents, before paring gains. It was last at about 1.3250, up 0.2 percent. Canada's 10-year yield rose 4 basis points to 2.04 percent, its highest in one month, as investors piled back into stocks on hopes Washington and Beijing are moving to end their trade dispute. Separately, Statistics Canada said foreign investors bought C$9.5 billion ($7.2 billion) in Canadian securities in November, mainly in bonds. Meanwhile, Canadian investors sold C$4.1 billion worth in foreign securities, led by U.S. shares. This was the largest divestment in a year. ($1 = 1.3247 Canadian dollars) (Reporting by Dale Smith in Ottawa and Fergal Smith, Nichola Saminather and John Tilak in Toronto; Editing by Susan Thomas and Jeffrey Benkoe)

China's envoy to Canada says Huawei 5G ban would have repercussions

Jan 17 2019

OTTAWA China's envoy to Canada on Thursday warned Ottawa there would be repercussions if it banned technology firm Huawei Technologies Co Ltd [HWT.UL] from supplying equipment to Canadian 5G networks, the latest blast in a deepening bilateral dispute.

Canada canola stocks hit four-year low, wheat supplies smaller than expected

May 05 2017

WINNIPEG/OTTAWA Canadian canola supplies fell to a four-year low in early spring, Statistics Canada said in a report on Friday, confirming fears of thin supplies after difficult harvest conditions.

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