2024-11-29 18:14

Loonie gains 0.1% against the U.S. dollar For the month, the currency loses 0.5% Canadian economy grows 1% in the third quarter 10-year yield hits a six-week low TORONTO, Nov 29 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Friday but was still headed for a weekly and monthly decline as domestic gross domestic product data bolstered bets for an outsized interest rate cut from the Bank of Canada in December. Canada's economy grew at an annualized rate of 1% in the third quarter, undershooting the Bank of Canada's forecast of 1.5%, after growing 2.2% in the prior quarter. "I think from the bank's perspective, this is going to add to the case for another 50 basis point cut in December," said Robert Both, Canadian macro strategist at TD Securities. Investors see a roughly 50% chance the BoC opts for a second consecutive unusually large half-percentage-point move at the Dec. 11 policy announcement, up from 31% before the data, swaps market data showed. A 25-basis-point step is fully priced into the market. The Canadian dollar strengthened 0.1% to 1.40 per U.S. dollar, or 71.43 U.S. cents, after moving in a range of 1.3981 to 1.4045. For the week, the loonie was down 0.1%, while it was down 0.5% for the month, its third straight monthly decline. On Tuesday, the currency touched a 4-1/2-year low at 1.4177, buffeted by the threat of hefty U.S. tariffs on imports from Canada. The U.S. dollar (.DXY) , opens new tab weakened on Friday against a basket of major currencies as hotter-than-expected Tokyo inflation data supported bets for a Bank of Japan interest rate hike next month. The price of oil, one of Canada's major exports, added to its weekly decline, dipping 0.1% to $68.65 a barrel, on easing concern over supply risks from the Israel-Hezbollah conflict. Canadian bond yields moved lower across the curve. The 10-year was down 7.7 basis points at 3.149%, after earlier touching its weakest level since Oct. 18 at 3.141%. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-posts-third-straight-monthly-decline-economy-slows-2024-11-29/

2024-11-29 16:04

OTTAWA, Nov 29 (Reuters) - Canada's budget deficit for the first six months of the 2024-25 fiscal year jumped by more than a half to C$13.01 billion ($9.28 billion) as program expenses and debt payment costs rose faster than the gain in revenues, the finance ministry said on Friday. The deficit in the same period a year earlier had been C$8.17 billion, it said in a statement. Program expenses rose 11.2% on increases across all major categories of spending. Public debt charges jumped by 22.5% largely because of higher interest rates, the ministry said. Year-to-date revenues grew by 9.6%, largely reflecting higher personal and corporate income tax revenue and revenue from other taxes and duties. On a monthly basis, Canada posted a deficit of C$3.17 billion in September, slightly narrower than C$3.88 billion deficit seen in September 2023. ($1 = 1.4017 Canadian dollars) ((Reuters Ottawa bureau; [email protected] , opens new tab)) Keywords: CANADA BUDGET/ Sign up here. https://www.reuters.com/world/americas/canadas-budget-deficit-first-six-months-202425-expands-c1301-bln-2024-11-29/

2024-11-29 15:42

Q3 growth led by household, government spending GDP grew by 0.1% in September on a monthly basis Growth seen at 0.1% in October, Statscan said Money markets see 44% chance of 50bps rate cut OTTAWA, Nov 29 (Reuters) - Canada's economy grew at an annualized rate of just 1% in the third quarter, less than what the Bank of Canada had predicted, prompting currency markets to boost bets for a jumbo rate cut next month. Friday's data from Statistics Canada were in line with market expectations but less than the 1.5% forecast by the BoC, which has in recent months fretted about sluggish growth. The boost to the GDP came from an unlikely growth in consumer spending and persistent government expenditure but it failed to offset declines see in business investments. GDP per person basis, a measure of standard of living, shrunk by 0.4% in the third quarter, its sixth consecutive quarterly decline. "Living standards are falling, policy is still restrictive, and inflation is at target – there is no convincing argument in the data as to why the Bank of Canada shouldn’t keep going at a 50bp pace in December," said Kyle Chapman, FX market analyst at Ballinger Group. The BoC has reduced borrowing costs by 125 basis points since June to 3.75% as the annual inflation rate fell back toward its 2% target and the bank grew more concerned about a hobbling economy. The GDP data as well as an employment report due early next month will help the Bank of Canada determine the size of an expected rate cut at its last monetary policy decision of the year on Dec. 11. Currency markets boosted their bets for a 50-basis-point reduction in interest rates next month to around 44% from 31% before the data were released. They are fully pricing in a 25-basis-point rate cut. The statistics agency revised the second quarter annualized growth to 2.2% from 2.1%. Economic growth on a monthly basis came below expectations at 0.1%, Statscan said, and a preliminary estimate showed growth was likely to be 0.1% in October. Analysts had predicted month-on-month GDP growth in September at 0.3%. The fourth-quarter number indicates a slower start to the final quarter of the year, which could force the bank to revise its fourth-quarter growth target it projected in October. The central bank will also have to adjust downward its third-quarter growth projection it announced in October, after already revising it once from its July number. TRUMP TARIFF THREAT Economists said growth prospects do not seem inspiring in the fourth quarter as well as the start of next year as a looming threat from proposed 25% unilateral tariffs by U.S. President-elect Donald Trump and immigration curbs will gnaw at the GDP pie. "In this climate of heightened uncertainty, it's hard to imagine business investment or international trade being strong contributors to Canada's growth on a sustained basis over the coming year," said Stephen Tapp, chief economist at the Canadian Chamber of Commerce. Business investments in machinery and equipments dropped by a whopping 7.8% in the third quarter and was followed by a 0.4% drop in housing renovations and 0.1% drop in new construction. Exports of goods and services also dropped by 0.3% after a 1.4% decline in the previous quarter, Statscan said. Household spending grew by 0.9% and was one of the main drivers of the growth along with continued government expenditures, it added. The Canadian dollar weakened slightly and was trading at C$1.4028 to the U.S. dollar, or 71.29 U.S. cents, down from $1.4009, or 71.38 U.S. cents. Sign up here. https://www.reuters.com/markets/canadas-economy-expands-by-just-1-chances-big-rate-cut-jump-2024-11-29/

2024-11-29 13:55

TORONTO, Nov 29 (Reuters) - Canada's economy grew as expected at an annualized rate of 1% in the third quarter, according to data released on Friday, helped by household and government spending and partly offset by lower business investments and exports. For the month of September, gross domestic product increased 0.1%, slower than expected, Statistics Canada data showed. A preliminary estimate showed growth of 0.1% in October. Market reaction: CAD/ LINK: https://www150.statcan.gc.ca/n1/daily-quotidien/241129/dq241129a-eng.htm , opens new tab COMMENTS ANDREW GRANTHAM, SENIOR ECONOMIST, CIBC CAPITAL MARKETS "Despite the positive historic revisions and better underlying detail within the Q3 data, today's GDP figures point to a weaker recent trend in activity than the Bank of Canada was expecting and is supportive of a 50 bp (basis point) cut at the December meeting, although next week's employment figures are still likely more important in making a final determination." DOUG PORTER, CHIEF ECONOMIST, BMO CAPITAL MARKETS "There are no surprises in terms of the latest figures. The headline quarterly numbers was pretty much exactly as Statistics Canada estimated a month ago. That is not to say it was a good number. Definitely disappointing given on where expectations were at the start of the quarter and the quarter clearly shows the economy struggled through the summer and early fall. The other thing is monthly results for September and October really did not pick up and this suggests that growth likely remains relatively sluggish through into the early part of the fourth quarter." NATHAN JANZEN, ASSISTANT CHIEF ECONOMIST, ROYAL BANK OF CANADA "This is kind of in line with our own base case assumption. We've had a persistent slowing in the Canadian economy, and if you look at kind of forward-looking indicators, like job openings, continuing to decline pretty sharply on balance, there are, at least in the near term, there are some indicators that have still been on the weak side. So it's not surprising to see GDP growth continue to underperform. ... It reinforces that interest rates are higher than they need to be to get inflation sustainably back to 2%." Sign up here. https://www.reuters.com/markets/view-canadas-economy-expands-by-1-third-quarter-2024-11-29/

2024-11-29 13:32

OTTAWA, Nov 29 (Reuters) - Canada's economy was up 1.0% on an annualized basis in the third quarter, in line with analysts' expectations, as higher household and government spending were moderated by slower non-farm inventory accumulation, Statistics Canada data showed on Friday. September's GDP rose 0.1% compared to August, below analysts' expectations, while October's GDP was also likely to increase by 0.1%, StatsCan said in a flash estimate. Following are seasonally adjusted figures for gross domestic product, in percent. With the exception of the price index data, they are adjusted for inflation. Q3 Q2 Q1 Annualized change +1.0 +2.2 +2.0 Change from previous quarter +0.3 +0.5 +0.5 Quarterly change in GDP implicit price index +0.6 +1.0 -0.2 NOTE: The median forecast of analysts in a Reuters poll was for 1.0% annualized growth in the third quarter and for September GDP to be up 0.3%. Keywords: CANADA ECONOMY/GDP Sign up here. https://www.reuters.com/markets/canadas-economy-up-10-annualized-q3-october-gdp-likely-up-01-2024-11-29/

2024-11-29 12:45

VALENCIA/MADRID, Nov 29 (Reuters) - Athlete Pau Gisbert decided not to run in the Valencia marathon this weekend because he couldn't focus on training amid the devastation that hit Spain's third-largest city in recent flash floods. The decision to go ahead with the race on Dec. 1, just a month after the raging waters killed 222 people, has sparked controversy. Critics say it is too soon, while businesses are welcoming a tourism boost that could help recovery. "When you look around, the town you grew up in practically doesn't exist anymore," said Gisbert, from the Valencia suburb of Paiporta. "Although your instinct pushes you to run for those four hours to feel like a normal person, your mind's elsewhere." Gisbert, 30, said he hoped those who decided to participate would take some time to visit the affected towns and empathise with victims who had lost so much. However, Ignacio Cardona, a greengrocer from one of the flooded areas to the city's south, said training for the marathon represented a "psychological release". "Running has been vital for me to be able to get out of this whole situation," he said. Two weeks ago, organisers told the record 35,000 participants who registered for the 42.2-km (26.4-mile) race around the coastal city's centre that it would still take place while raising funds to help rebuild damaged sports facilities. "Valencia runs for Valencia," read the marathon's official website, where the organisers pledged to donate 3 euros ($3.17) for every runner who makes it to the finish line. Participants - 62% of whom come from abroad and 18% from other Spanish regions according to organisers - are also invited to donate to a joint flood recovery fund to which the race's sponsors will contribute, too. The marathon is also an opportunity for hotel and restaurant owners to tempt tourists back to one of Spain's most popular destinations after the Oct. 29 tragedy. Up to 60% of visitors cancelled their hotel bookings after the floods - twice the usual rate - and restaurants saw an 80% drop in sales, according to local business groups. For the weekend of the marathon, hotel occupancy rates are nearing 80%, said Mayte Garcia, the head of regional hotel association Hosbec. Manuel Espinar, a spokesperson for the local restaurant association, lost two businesses to the floods. "We're all in shock ... Valencia's image has been affected, but we have to show that the city's alive," he said. ($1 = 0.9478 euros) Sign up here. https://www.reuters.com/sports/athletics/valencia-marathon-stirs-controversy-one-month-after-deadly-floods-2024-11-29/