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
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.
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
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
"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
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,"
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)
(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
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)
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.
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.