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  • China’s producer prices slump 4.6% in May, worse than expected

    • Economists surveyed by Reuters expected China’s consumer price index to rise 0.3% year-on-year after marking a two-year low of 0.1% in April. Month-on-month, economists predicted a 0.1% decline.
    • Recent economic data pointed to a disappointing recovery from China’s strict Covid lockdown measures as the economy struggles with softening demand and falling exports.

    https://www.cnbc.com/2023/06/09/chinas-inflation-rises/falls.html

  • Canada’s trade surplus widens to $1.94-billion as export volumes hit all-time high in April

    Canada’s exports jumped 2.5 per cent in April and hit an all-time high by volume, while imports declined 0.2 per cent partly because of a fall in energy products, Statistics Canada said on Wednesday.

    As a result, the country’s trade surplus with the world widened to $1.94-billion in April, more than double analysts’ forecasts of a C$900-million surplus. March’s surplus was downwardly revised to $231-million from $972-million.

    The Canadian economy has largely been outperforming expectations despite record-paced interest rate hikes by the Bank of Canada between March 2022 and January this year.

    The bank on Wednesday raised its key overnight benchmark rate to a 22-year high of 4.75 per cent on increasing concerns that inflation could get stuck significantly above its 2 per cent target amid persistently strong economic growth.

    Stuart Bergman, chief economist at Export Development Canada, said April’s data was good but cautioned that the exports level may not be sustainable.

    “”At face value the headline number is fairly good but as you dig a little bit deeper there is cause for some concern as to whether we would expect to see these export gains repeated in May and June,” Bergman said.

    The surge in exports was driven by metal and non-metallic mineral products as well as energy products, Statscan said. By volume, exports were up 2.8 per cent and surpassed pre-COVID-19 pandemic levels.

    The rise in metal product exports included higher transfers of gold assets from Canadian financial institutions to the United States in a sign economic uncertainty is making investors favour the safe-haven metal, the agency said.

    “The cautionary note is many of those volume shipments reflect those truckloads of gold being shipped down to the U.S. and so certainly that’s not something that we would expect to see repeated in future months,” Bergman said.

    Imports declined for a third consecutive month, in part due to lower crude shipments from Saudi Arabia and the United States. Imports of refined petroleum products also contributed to the decrease. By volume, total imports increased 1 per cent.

    Last week, data showed that Canada’s economy benefited from favourable international trade and expanded faster than expected in the first quarter ended March and likely accelerated further in April. Annual inflation also came in hotter than anticipated in April, accelerating for the first time in 10 months to 4.4 per cent, more than double the BoC’s 2 per cent target.

  • Bank of Canada raises key interest rate to 4.75%, the highest level in 22 years. Here’s what’s next

    The Bank of Canada has resumed its monetary policy tightening campaign, increasing its benchmark rate by a quarter percentage point on Wednesday.

    The decision lifts the policy rate to 4.75 per cent, the highest level since May, 2001, pushing up mortgage rates and squeezing household budgets.

    The central bank’s campaign had been on hold since January as it waited to see if borrowing costs were high enough to get inflation under control. However, a run of stronger-than-expected data over the past month called that “conditional pause” into question and brought the bank off the sidelines.

    • Deputy governor Paul Beaudry will deliver an economic progress report on Thursday outlining the bank’s rationale for this week’s decision. The speech to the Victoria Chamber of Commerce starts at 3:25 p.m. ET, with a press conference 4:45 p.m. It will be Mr. Beaudry’s last appearance before he retires from the bank in July.
    • The Bank of Canada’s next rate decision is on July 12, when it will also publish an updated projection for economic growth and inflation.
    • Statistics Canada will release May Labour Force Survey data on Friday. Central bankers will be watching this closely for signs that the labour market is weakening. This could mean an uptick in unemployment or a slowdown in the pace of wage growth. May consumer price index data –which tracks inflation – will be published on June 27.
    • The U.S. Federal Reserve’s next rate announcement is on June 14. Chair Jerome Powell suggested last month that the central bank could pause its rate-hike campaign at the next meeting. However, stronger-than-expected economic data has kept open the possibility of a least one more rate increase this summer.

  • U.S. Trade Deficit Widens Significantly As Exports Slump, Imports Jump

    A report released by the Commerce Department on Wednesday showed the U.S. trade deficit widened significantly in the month of April.

    The Commerce Department said the trade deficit increased to $74.6 billion in April from a revised $60.6 billion in March.

    Economists had expected the trade deficit to jump to $75.2 billion from the $64.2 billion originally reported for the previous month.

    The trade deficit in April marked the biggest since the deficit reached $78.3 billion in October 2022.

    The wider trade deficit came as the value of exports plunged by 3.6 percent to $249.0 billion in April after surging by 1.8 percent to $258.2 billion in March.

    The sharp pullback by exports reflected a steep drop in exports of industrial supplies and materials, including crude oil, as well as a notable decrease in exports of consumer goods.

    Meanwhile, the report said the value of imports jumped by 1.5 percent to $323.6 billion in April after tumbling by 1.6 percent to $318.8 billion in March.

    Imports of automotive vehicles, parts and engines led the rebound, with imports of industrial supplies and materials also showing notable growth.

    “Net exports will likely be a drag on Q2 US GDP as resilient consumer spending keep imports elevated,” said Matthew Martin, U.S. Economist at Oxford Economics.

    He added, “That said, we expect imports to weaken in the months ahead as consumers continue to normalize spending patterns and businesses investment feels the pinch of tighter lending conditions and higher interest rates.”

    The Commerce Department also said the goods deficit spiked to $96.1 billion in April from $81.6 billion in March, while the services surplus rose to $21.6 billion from $21.0 billion.

  • Bank Of Canada Resumes Raising Interest Rates

    After leaving interest rates unchanged for two straight meetings, the Bank of Canada on Wednesday announced it has decided to once again raise rates.

    The Bank of Canada increased its target for the overnight rate by 25 basis points to 4.75 percent, citing stubbornly high inflation and stronger than expected economic growth.

    Canada’s central bank said the rate hike reflects its view that monetary policy was not sufficiently restrictive to bring supply and demand back into balance and return inflation sustainably to the 2 percent target.

    The Bank of Canada also said it is continuing its policy of quantitative tightening, which it said is complementing the restrictive stance of monetary policy and normalizing the bank’s balance sheet.

    The bank’s Governing Council said it will continue to assess the dynamics of core inflation and the outlook for consumer price inflation.

    The Bank of Canada reiterated that it remains resolute in its commitment to restoring price stability for Canadians.

  • Canadian Market Down Marginally After BoC Raises Interest Rate

    Published: 6/7/2023 11:54 AM ET

    The Canadian market is down marginally around late morning on Wednesday, with investors digesting the Bank of Canada’s decision to raise interest rates by 25 basis points.

    The Canadian central bank this morning increased its target for the overnight rate by 25 basis points to 4.75%, citing stubbornly high inflation and strong than expected economic growth.

    The BoC, which had left interest rates unchanged for two straight meetings, said the rate hike reflects its view that monetary policy was not sufficiently restrictive to bring supply and demand back into balance and return inflation sustainably to the 2% target. The central bank reiterated that it remains resolute in its commitment to restoring price stability for Canadians.

    The bank’s Governing Council said it will continue to assess the dynamics of core inflation and the outlook for consumer price inflation.

    Technology stocks are notably lower. Several stocks from healthcare, consumer staples and consumer discretionary sectors are also weak. Energy stocks are gaining, tracking higher crude oil prices.

    The benchmark S&P/TSX Composite Index is down 37.00 points or 0.19% at 20,018.60 a few minutes before noon. The index, which climbed to 20,149.95 just before the announcement of the rate decision, dropped to 19,994.29 subsequently.

    By RTTNews Staff Writer   ✉  | Published: 6/7/2023 11:54 AM ET

    The Canadian market is down marginally around late morning on Wednesday, with investors digesting the Bank of Canada’s decision to raise interest rates by 25 basis points.

    The Canadian central bank this morning increased its target for the overnight rate by 25 basis points to 4.75%, citing stubbornly high inflation and strong than expected economic growth.

    The BoC, which had left interest rates unchanged for two straight meetings, said the rate hike reflects its view that monetary policy was not sufficiently restrictive to bring supply and demand back into balance and return inflation sustainably to the 2% target. The central bank reiterated that it remains resolute in its commitment to restoring price stability for Canadians.

    The bank’s Governing Council said it will continue to assess the dynamics of core inflation and the outlook for consumer price inflation.

    Technology stocks are notably lower. Several stocks from healthcare, consumer staples and consumer discretionary sectors are also weak. Energy stocks are gaining, tracking higher crude oil prices.

    The benchmark S&P/TSX Composite Index is down 37.00 points or 0.19% at 20,018.60 a few minutes before noon. The index, which climbed to 20,149.95 just before the announcement of the rate decision, dropped to 19,994.29 subsequently.

    read moreRTTNews1yslide-imageslide-imageslide-imageTop Biotech IPOs Of 2021 That Soared As Much As500%Top Biotech IPOs Of 2021 That Soared As Much As 500%-Share Story
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    Among technology stocks, Hut 8 Mining Corp (HUT.TO) is down 3.7% and Shopify Inc (SHOP.TO) is lower by about 3.1%. BlackBerry (BB.TO), Quarterhill (QTRH.TO), Open Text Corp (OTEX.TO) and Descartes Systems Group (DSG.TO) are down 2 to 2.2%. Kinaxis (KXS.TO) and Converge Technology Solutions (CTS.TO) are also notably lower.

    Healthcare stocks Tilray Inc (TLRY.TO) and Canopy Growth Corporation (WEED.TO) are down 2.5% and 2%, respectively. Bausch Health Companies (BHC.TO) is down 0.7%.

    Consumer discretionary stocks Sleep Country Canada Holdings (GOOS.TO), Restaurant Brands International (QSR.TO) and MTY Food Group (MTY.TO) are down 2.4%, 2.2% and 1.9%, respectively.

    Data from Statistics Canada showed, Canada posted a trade surplus of C$ 1.94 billion in April of 2023, wider than the downwardly revised surplus of C$ 0.23 billion in the previous month. Exports jumped by 2.5% to C$ 64.8 billion, while imports fell by 0.2% to C$ 62.9 billion.

  • China’s exports plunge by 7.5% in May, far more than expected

    • Exports fell 7.5% in May from a year ago, far worse than the 0.4% decline predicted by a Reuters poll.
    • Imports for May dropped by 4.5% from a year ago — less than the 8% plunge forecast by Reuters.
    • The decline was so sharp that export volumes are below their levels at the start of the year, after accounting for seasonality and changes in export prices, Julian Evans-Pritchard, head of China Economics, at Capital Economics, said in a note.

    https://www.cnbc.com/2023/06/07/chinas-exports-plunge-by-7point5percent-in-may-far-more-than-expected.html

  • U.S. Service Sector Growth Slows More Than Expected In May

    Published: 6/5/2023 10:51 AM ET

    Service sector activity in the U.S. saw only modest growth in the month of May, according to a report released by the Institute for Supply Management on Monday, with the index of activity in the sector falling by more than expected.

    The ISM said its services PMI fell to 50.3 in May from 51.9 in April, although a reading above 50 still indicates growth in the sector. Economists had expected the index to edge down to 51.5.

    The bigger than expected decrease by the headline index was partly due to a slowdown in the pace of growth in new orders, as the new orders index slid to 52.9 in May from 56.1 in April.

    The employment index also dropped to 49.2 in May from 50.8 in April, indicating a decrease in service sector jobs following three consecutive months of growth.

    The report also showed the business activity index edged down to 51.5 in May from 52.0 in the previous month.

    “There has been a pullback in the rate of growth for the services sector,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee. “This is due mostly to the decrease in employment and continued improvements in delivery times (resulting in a decrease in the Supplier Deliveries Index) and capacity, which are in many ways a product of sluggish demand.”

    The supplier deliveries index slipped to 47.7 in May from 48.6 in April, with a reading below 50 indicating faster deliveries.

    Nieves added, “The majority of respondents indicate that business conditions are currently stable; however, there are concerns relative to the slowing economy.”

    On the inflation front, the prices index fell to 56.2 in May from 59.6 in April, suggesting a slowdown in the pace of price growth.

    The ISM released a separate report last Thursday showing U.S. manufacturing activity contracted at a slightly faster rate in the month of May.

    The ISM said its manufacturing PMI slipped to 46.9 in May from 47.1 in April, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 47.0.

  • Gold Holds Steady As Growth Worries Mount

    Published: 6/6/2023 5:55 AM ET

    Gold prices were flat to slightly higher on Tuesday, as the dollar pulled back, and U.S. bond yields declined on hopes for a pause in Fed hikes at both June and July policy meetings.

    Spot gold was virtually unchanged at $1,961.82 per ounce, while U.S. gold futures were up 0.2 percent at $1,977.85.

    Data showed on Monday that the U.S. services sector barely grew in May and new orders for manufactured goods rose by slightly less than expected in April, rekindling concerns about inflation and a potential recession.

    German factory orders data as well as Eurozone and British retail sales figures all disappointed today – denting appetite for riskier assets.

    Geopolitical tensions also remained on investors’ radar after the Ukrainian government accused Russia of blowing up the Nova Kakhovka dam on the Dnipro River, which provides water to Crimea and the Zaporizhzhia Nuclear Power Plant (ZNPP).

    The International Atomic Energy Agency (IAEA) is monitoring the situation closely.