• 2020-06-04 14:00

    By Greg Quinn

    OTTAWA (MNI) - Bank of Canada Deputy Governor Toni Gravelle said Thursday policymakers will expand asset purchases if needed to fend off deflation, and can also check any surge in prices by raising interest rates no matter how big the balance sheet gets.

    Speaking one day after Tiff Macklem took over as BOC governor from Stephen Poloz, Gravelle also affirmed Macklem's earlier comments that the 0.25% policy rate is as low as it can go before it would destabilize markets.

  • 2020-06-04 12:14

    --Services Trade Balance CAD203 Mln in April Vs -CAD1.1 Bln March

    OTTAWA (MNI) - Canada had its first surplus in global services trade in at least two decades in April, as health lockdowns erased a longstanding shortfall in travel spending.

    The balance swung to a CAD302 million surplus from March's CAD1.1 billion deficit, according to Statistics Canada data published Thursday. It's the first such surplus in data going back to 2007, and the deficit was as high as CAD1.9 billion in December.

    Travel services moved to a CAD763 million surplus in April from deficits of CAD166 million in March and CAD1.1 billion in February.

  • 2020-06-04 10:14

    --Trade Balance -CAD3.3B Vs Forecast -CAD3B

    OTTAWA (MNI) - Canada's exports and imports saw record declines in April as Covid-19 shut auto plants and energy prices swooned, widening the trade deficit to CAD3.3 billion from CAD1.5 billion.

    Exports fell 30% to CAD32.7 billion and imports by 25% to CAD35.9 billion, both the lowest totals in about a decade, Statistics Canada said Thursday from Ottawa. The declines in exports and imports were all-time records in dollar value and percentage terms.

    The trade balance remained close to the MNI economist median of -CAD3 billion, and it was the largest deficit since February 2019.

  • 2020-06-03 10:38

    By Greg Quinn

    OTTAWA (MNI) - Following is text of the BOC's changes to repo and BA purchase operations:

    With substantial improvements in short-term funding conditions recently, as well as reduced participation since mid-April in the Bank's extended Term Repo and Bankers' Acceptance Purchase Facility (BAPF) operations, the Bank is making amendments to these programs.

    Effective June 16, 2020, the Bank will reduce the frequency of its Term Repo operations from twice to once per week. Correspondingly, the number of maturity points per week will be reduced from four to two, with the Bank continuing to offer repo operations out to two years.

  • 2020-06-03 10:22

    By Greg Quinn

    OTTAWA (MNI) - Following is the text of the BOC's rate decision Wednesday.

    The Bank of Canada today maintained its target for the overnight rate at the effective lower bound of 0.25 percent. The Bank Rate is correspondingly 0.5 percent and the deposit rate is 0.25 percent.

    Incoming data confirm the severe impact of the COVID-19 pandemic on the global economy. This impact appears to have peaked, although uncertainty about how the recovery will unfold remains high. Massive policy responses in advanced economies have helped to replace lost income and cushion the effect of economic shutdowns. Financial conditions have improved, and commodity prices have risen in recent weeks after falling sharply earlier this year.

  • 2020-05-29 15:38

    By Greg Quinn

    OTTAWA (MNI) - The Bank of Canada's balance sheet grew CAD21.7 billion this week to a record CAD464 billion on government debt and repos to aid markets strained by Covid-19.

    Central bank holdings of federal t-bills rose to CAD104 billion from CAD91.7 billion, and Canadian bonds to CAD133 billion from CAD125 billion. The BOC also held another CAD7.9 billion of provincial debt, reflecting early weeks of plans to buy CAD50 billion of local government bonds and 40% of their money-market paper.

    Governor Stephen Poloz told lawmakers Monday it will be a while before the economic recovery is advanced enough to scale back a pledge to buy at least CAD5 billion a week of federal bonds.

  • 2020-05-29 09:32

    --Biggest Decline Since 2009 Sets Up Much Worse Q2 Amid Full Lockdown

    OTTAWA (MNI) - Canada's first-quarter GDP fell at an 8.2% annualized pace, the fastest since 2009 and setting the stage for the biggest shock in the nation's history this quarter as Covid-19 health lockdowns took full effect.

    Household spending dropped at a record 9% including sharp falls in clothing, automobile sales and travel services. Exports and imports both tumbled more than 10% and business investment excluding housing fell by 2.7%, continuing years of weakness.

    Even the government's push to get relief cash out the door wasn't enough to boost its spending as the pandemic closed schools and administration offices. Government consumption fell 3.8%, the most since 2013.

  • 2020-05-28 13:53

    By Greg Quinn

    OTTAWA (MNI) - Mark Carney warned leaders from the UK, Germany, France and Canada at a UN conference Thursday not to remove stimulus too soon through the Covid-19 pandemic, and said traditional fiscal action is less powerful with households skittish about spending.

    "Countries will need to use all of their policy instruments," Carney told the conference. "We have to be careful not to withdraw that stimulus too soon as we saw shortly thereafter" the global financial crisis in 2009, he said.

    "Coming out of this crisis, some of traditional stimulus measures will be less effective than usual, think of income transfers or temporary tax cuts, because they will be dampened by heightened risk aversion" Carney said.

  • 2020-05-28 08:44

    --Annualized Contraction Would Be Worst In Postwar Records, Rival 1930s

    OTTAWA (MNI) - Canada's first-quarter GDP due Friday will likely show a 10% annualized decline as the Covid-19 lockdown took hold, and that's a fraction of the second-quarter plunge that will rival anything in the nation's history.

    The MNI economist median mirrors the annualized reading indicated by Statistics Canada's flash estimate published last month.

  • 2020-05-27 12:18

    By Greg Quinn

    OTTAWA (MNI) - Canadian Prime Minister Justin Trudeau signaled he plans to scale back some Covid-19 relief programs as the economy re-opens, a shift from months of almost daily spending announcements.

    Fewer people will need the flagship CERB checks aimed at those who didn't qualify for regular unemployment benefits, Trudeau said at a press conference Wednesday. There will be relatively more need for the wage subsidy that helps employers avoid layoffs, he said.

    "Right now we're very focused on getting through this particular crisis," Trudeau said.