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  • 2020-07-10 14:14


    By Greg Quinn

    OTTAWA (MNI) - The Bank of Canada's balance sheet was little changed at a record CAD529 billion this week as gains in federal bonds and bills were mostly offset by a reduced stock of corporate repos, an imbalance likely to continue with the government projecting a CAD343 billion deficit.

    Federal bond holdings climbed to CAD173 billion from CAD167 billion, faster than the minimum CAD5 billion a week the BOC has pledged to acquire until the economic recovery is well underway. Canadian t-bill assets rose to CAD136 billion from CAD130 billion.

    Holdings of repos fell to CAD195 billion from CAD205 billion, the lowest since May 13 and down from a peak of CAD211 billion about a month ago.

  • 2020-07-10 07:30


    By Greg Quinn

    (MNI) - Governments must keep fiscal stimulus going through the recovery from the Covid-19 pandemic, while making hard choices about ending support for industries like airlines and fossil fuels facing a long-term reduction in demand, the IMF said Friday.

    "Fiscal policy will need to remain supportive and flexible until a safe and durable exit from the crisis is secured," Fiscal Affairs Director Vitor Gaspar and Research Director Gita Gopinath wrote in a blog post.

    "It will be necessary to facilitate the transfer of resources from sectors that may permanently shrink, such as air travel, to sectors that will be expanding, such as digital services. Support should move from maintaining jobs to supporting people as they retrain or relocate across sectors.

  • 2020-07-09 12:00


    By Greg Quinn and Brooke Migdon

    WASHINGTON (MNI) - Congress should extend fiscal stimulus as damage from Covid-19 lingers while the Federal Reserve should be ready with forward guidance and expanded QE if the economy weakens further, the OECD said Thursday.

    The banking system also faces risks if stimulus is withdrawn and there is a surge in bankruptcies from highly leveraged companies, the Paris-based group said in an annual review of the world's largest economy.

    "A sharp fiscal retrenchment would be counter-productive and as such the temporary provisions in the recent tax reform should not be allowed to expire. Furthermore, automatic stabilizers and additional measures implemented as part of the crisis reaction should be allowed to play out," the OECD report said.

  • 2020-07-09 01:36


    --Second Straight Meet All Nine Regions Cut View

    TOKYO (MNI) - All nine of Japan's regions lowered their economic assessment from three months ago, as the coronavirus impacted personal spending, production and capital investment, the Bank of Japan's quarterly regional economic report showed Thursday.

    It is the second straight time that all nine regions lowered their assessment from their previous meeting.

    "According to assessments from regions across Japan, all nine regions revised down their assessments from the previous ones, as was the case in April 2020,due to the impact of the novel coronavirus (COVID-19), and reported that their economy had deteriorated or had been in a severe situation," the July report said.

    Many branch managers noted the drop in the three m

  • 2020-07-08 22:00


    TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda has maintained his cautious view that economic conditions in Japan are expected to remain severe due to the impact of the coronavirus.

    "Looking ahead, economic activities are expected to resume but (the) severe situation will likely continue for the time being due to the infectious disease," Kuroda said at the opening of the quarterly branch managers' meeting on Thursday.

    He also said the BOJ will not hesitate to take additional policy easing measures if they are necessary to support the economy, while keeping a close eye on the impact of the coronavirus.

    However Kuroda did not elaborate on when or how the bank would consider additional policy easing.

    --MONETARY POLICY

    Kuroda said the BOJ continues to

  • 2020-07-08 16:56


    By Brooke Migdon

    WASHINGTON (MNI) - More than one-third of U.S. households anticipate a loss in employment income in the next four weeks, led by deteriorating sentiment in the South and West following an uptick in Covid-19 cases that is triggering new businesses shutdowns.

    Approximately 35% of households expect to lose sources of income in the latest Census Bureau Household Pulse Survey, reflecting data from 250 million households across the U.S. from June 25-30.

  • 2020-07-08 14:11


    By Greg Quinn

    OTTAWA (MNI) - Following are highlights of Canadian Finance Minister Bill Morneau's speech to Parliament to deliver a fiscal snapshot Wednesday:

    Through rapid and broad support, our government has been able to protect millions of jobs, provide emergency income support to families, and help keep businesses afloat during the worst of the storm.

    This support is helping Canadians get back on their feet, and has prevented long term damage. But this pandemic is not over and we cannot let up on our commitment to one other.

    Forecasts are always uncertain. So with this Snapshot, we are providing our best prediction of the economic situation in Canada to the end of the current fiscal year, to March 31st, 2021.

  • 2020-07-08 14:11


    By Greg Quinn

    OTTAWA (MNI) - Following are highlights from the Canadian Finance Department's annual Debt Management Strategy for the fiscal 2020-21 year, published Wednesday from Ottawa:

    The current environment provides a unique opportunity for the government to issue an unprecedented level of long term bonds at historically low interest rates. This will ensure Canada's debt remains affordable and is less vulnerable to increases in interest rates for future generations.

    In pursuing a historic level of issuance in long-term bonds, the government will consult over the coming months with market participants to assess the market's capacity for long-term debt.

  • 2020-07-08 09:34


    -Sunak Says New Measures Worth "Up to GBP30 billion" -Will Look At Debt-Interest Fiscal Rule "Keenly"

    LONDON (MNI) - Government stimulus for the hard-hit UK economy could total as much as GBP30 billion, some 1.5% of GDP, Chancellor Rishi Sunak said in his Summer Statement Wednesday, although the actual cost is likely to be markedly less.

    Sunak did not introduce any new fiscal rules in his speech but in response to a parliamentary question said he would look "keenly in coming months" at a debt-interest rule and pledged to return finances to a sustainable basis in the medium term.

    Debt-interest costs have fallen in line with lower interest rates, despite the surge in debt and, as MNI has reported, a debt-to-revenue measure is likely to be one of Sunak's f

  • 2020-07-08 02:31


    --BOJ Officials See Homeworking May Lead To Job Losses

    TOKYO (MNI) - The BOJ sees the labor market worsening from current levels, even if the economy recovers through H2, pushing the unemployment rate higher and worsening the output gap.

    At present, the BOJ will not take additional policy easing measures, believing recent measures to get financing in place for small and medium-sized companies will offer at least some support for employees, MNI understands.

    Pre-pandemic, the BOJ highlighted the tightness of labor market condition, or labor shortages, was, along with an ageing population, in part a bi-product of accommodative policy and helped keep upward pressure on wages and inflation.

    One concern is that an increase in unemployment levels will wei