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(33) Gravitas Plus: Which countries could go the Sri Lanka way – YouTube

PUBLISHED MON, MAY 30 202212:50 AM EDT

• Brent crude futures gained 46 cents, or 0.4%, to $119.89 a barrel at 0111 GMT.
• U.S. West Texas Intermediate (WTI) crude futures jumped 60 cents, or 0.5%, to $115.67 a barrel, extending solid gains from last week.

https://www.cnbc.com/2022/05/30/oil-markets-russia-european-union.html

CGI completes acquisition of French-based Harwell Management to offer a broader range of financial consulting services

Paris, France, May 30, 2022

CGI (NYSE: GIB) (TSX: GIB.A) has completed, through its subsidiary CGI France SAS (“CGI France”), the previously announced acquisition of Harwell Management, a leading management consulting firm specializing in financial services for the French market. As the demand for management consulting services rises worldwide, CGI continues to broaden its capabilities to ensure the delivery of end-to-end capabilities, deep industry knowledge and experience, close collaboration, and trusted partnership for clients in France and across the globe.

Founded in 2009, Harwell Management has 150 employees who will join CGI Business Consulting in France, expanding its offerings in various financial services segments, including retail banking, corporate and investment banking, capital markets, insurance and healthcare mutuals, as well as other specialized financial services, such as leasing, personal financing and factoring.

https://www.cgi.com/en/cgi-completes-acquisition-french-based-harwell-management-offer-broader-range-financial-consulting-services#:~:text=Paris%2C%20France%2C%20May%2030%2C%202022%20CGI%20%28NYSE%3A%20GIB%29,specializing%20in%20financial%20services%20for%20the%20French%20market.

Oil Prices Hit Over Two-month Highs Ahead Of EU Meeting

Oil prices hit their highest level in more than two months on Monday, as China eased COVID-19 restrictions and moved to stimulate the country’s faltering economy.

Benchmark Brent crude futures rose half a percent to $116.12 a barrel, while U.S. crude futures were up half a percent at $115.64.

Both Beijing and Shanghai eased COVID restrictions, with authorities in Shanghai rolling out a total of 50 stimulus measures to support the local economy, which has been hit hard by the restrictions.

Investors also await the outcome of a two-day meeting of EU member states later in the day to debate the sixth package of sanctions to punish Moscow.

A high-ranking EU official stated that it is critical to keep working and not give up until the deal on the sixth package of sanctions is reached.

The EU failed on Sunday to agree on an embargo of Russian oil over Moscow’s invasion of Ukraine.

Also, the oil producers’ international cartel, the Organization of the Petroleum Exporting Countries (OPEC), is set to rebuff Western calls to speed up their oil output additions when they meet on Thursday.

Published: 5/30/2022 1:53 PM ET

Canadian Market Set For Another Bright Close

Canadian stocks are extending gains to a seventh straight session thanks to sustained buying at several counters from across various sectors on Monday.

Gains in Asian and European markets amid optimism about economic recovery in China following an announcement of additional stimulus and easing of coronavirus restrictions in Shanghai contribute to the bullish sentiment in the Canadian market.

The benchmark S&P/TSX Composite Index is up 169.11 points or 0.82% at 20,917.69.

Energy, consumer discretionary and technology stocks are up with strong gains. Financials, healthcare and consumer staples shares are among the other major gainers.

The Energy Capped Index is up nearly 2%. Advantage Oil & Gas (AAV.TO), Secure Energy Services (SES.TO), Parex Resources (PXT.TO), Baytex Energy (BTE.TO), Paramount Resources (POU.TO), Cenovus Energy (CVE.TO), Peyto Exploration (PEY.TO), MEG Energy (MEG.TO) and Arc Resources (ARX.TO) are up 2.5 to 6%.

The Consumer Discretionary Capped Index is up 1.81%. Canada Goose Holdings (GOOS.TO), Brp Inc (DOO.TO), Linamar Corp (LNR.TO), Restaurant Brands International (QSR.TO), Sleep Country Canada Holdings (ZZZ.TO) and Spin Master Corp (TOY.TO) are gaining 2 to 3.1%.

In the technology section, Hut 8 Mining Corp (HUT.TO) is soaring nearly 11%. Softchoice Corp (SFTC.TO) is rising 7.5%, while Converge Technology Solutions (CTS.TO), Lightspeed Commerce (LSPD.TO), Tecsys Inc (TCS.TO) and Dye & Durham (DND.TO) are up 5 to 6%.

Among financials shares, Goeasy (GSY.TO) is up 3.5% and CDN Western Bank (CWB.TO) is gaining 2.3%, while Canadian Imperial Bank of Commerce (CM.TO), Laurentian Bank (LB.TO), Royal Bank of Canada (RY.TO) and Sun Life Financial (SLF.TO) are up 1 to 1.2%.

Data released by Statistics Canada showed Canada recorded a current account of C$5.03 billion in the first quarter of 2022, from the downwardly revised gap of C$0.14 billion in the previous quarter.

Oil climbs ahead of EU meeting on Russia sanctions

• Brent crude futures gained 46 cents, or 0.4%, to $119.89 a barrel at 0111 GMT.
• U.S. West Texas Intermediate (WTI) crude futures jumped 60 cents, or 0.5%, to $115.67 a barrel, extending solid gains from last week.

https://www.cnbc.com/2022/05/30/oil-markets-russia-european-union.html

Japan’s Nikkei 225 jumps 2% as Asia stocks rise ahead of major economic data this week

• Shares in Asia-Pacific were higher in Monday trade, with Japanese stocks leading gains regionally.
• China is set to announce its official manufacturing Purchasing Managers’ Index for May on Tuesday, while U.S. jobs data is expected Friday.
• Markets in the U.S. are closed on Monday for a holiday.

https://www.cnbc.com/2022/05/30/asia-markets-china-economy-currencies-oil.html

At Davos, a World Economic Forum without economics

Gloomy and foreboding clouds loomed over the Swiss Alps at this year’s annual meeting of the World Economic Forum. Geopolitics dominated conversations in Davos more than ever before as war rages on in Ukraine, food shortages threaten and uncertainty mounts over the U.S.-China relationship.

Russia House on Davos’s promenade, formerly a hub for oligarchs and politicians conducting business, was transformed into an exhibition of alleged Russian war crimes, and the conference was rife with Ukrainian delegates, including the mayor of Kyiv, Vitali Klitschko, petitioning for further support and sanctions against their aggressor.

That conflict and other geopolitical developments, not least of which is the potential for famine in many parts of the world, have business leaders rightly concerned, but what was startling was the lack of emphasis on major economic issues that have them equally apprehensive.

In private conversation, virtually everyone agreed that the combination of inflation, stock-market declines, lockdowns in China and the growing possibility for a major global recession are contributing to a troubling economic outlook. And yet this year’s agenda was short on discussion of these issues. By comparison, in 2009, after the global financial crisis, the Forum was equally gloomy, but acutely focused on economic recovery plans and how the globalized system could respond to the shock.

Davos ends with Germany pushing global work on climate, war

Geopolitics and economics are inextricably linked and Davos usually serves as a place where the two realms can interact to discuss solutions. This year, something was different.

Unsurprisingly, Russian and Chinese delegates didn’t attend, but also absent were many Western politicians. The leading Canadian official there was François-Philippe Champagne, our Minister of Innovation, Science and Industry, but even he didn’t stay long enough to partake in an Invest in Canada event that was sparsely attended, largely thanks to the absence of any Canadian leaders.

Business leaders concerned with growing economic and geopolitical risks all wanted political leaders to be in Davos, to discuss Ukraine, sanctions, China and economic policy, but were left disappointed, and the lack of politicians only added to the uncertain mood. Notable exceptions included German Chancellor Olaf Scholz and Dutch Prime Minister Mark Rutte, who were present and engaged.

Geopolitical discussions, such as Volodymyr Zelensky’s virtual address, packed seats at the Forum. Conversely, discussions on economics were most notable for empty venues. It’s not as if business leaders aren’t seized with the multitude of threats facing the global economy, not least of which is rising inflation, but perhaps it was because on their own they are limited in how they can address them.

This was probably the year that political leaders needed to be at the Forum more than ever. However, it was also the year where it was most difficult for them to attend. During a cost-of-living crunch, a war in Europe, increased inequality, and people becoming more polarized and disenfranchised (not to mention the heightened conspiratorial theories around the Forum), many politicians wouldn’t dare be seen in Davos. That’s partly because of the fear of backlash from constituents and partly a failure to acknowledge that the private sector could contribute to the solution to many of the ills facing the world.

To be clear, it is equally a failure of the private sector to believe that issues such as climate change, which seem to have declined on the Davos agenda, cannot be solved without significant political and regulatory co-ordination and oversight.

In spite of many people’s skepticism about the Forum, those gathered there have a desire and an incentive to prevent the world being plunged into crisis. They come to work with politicians on energy transition, the impacts of supply chain disruptions, labour shortages, food supply and wealth inequality.

Whether the format of the Forum is effective is a separate question, especially as those most affected by these issues sadly are not part of the conversation. But we do need a venue to take on these issues, with both public and private sector involvement. And, in that regard, this year’s meeting failed.

Nevertheless, there were a few positive signs. It seems the shocks of the past two years and the lessons of the past two decades have galvanized a change in approach from capitalism’s leading proponents. Resilience, sustainability and long-termism have been incrementally advanced from the fringes of the Forum over its 50-year history and now have become central.

In addition, it was clear that technology is having positive benefits for the world and can be applied to complex public issues. For instance, a case study was presented about how big data and analytics (provided through a public-private partnership) helped Britain’s National Health Service lead the world on vaccine rollout and is now creating efficiency in dealing with that system’s COVID-19-caused backlog. It is model for other single-payer health systems, including our own.

It is examples such as these that demonstrate the positive impact of the World Economic Forum.

It makes sense that people are fed up with the status quo, but the reality is that with so many economic and geopolitical problems persisting and proliferating, government and business need to come together to chart a path forward. This was the year, above others, when politicians could have stood and defended their participation.

I am not a pessimist by nature, nor an alarmist, but there is a cacophony of economic issues that are very real and very urgent, starting with inflation. For summits such as this to be effective, we need the most powerful people in the world there to debate issues and, ideally, potential solutions. And, whether we like it or not, those people are still our politicians.

Bank of Canada expected to announce another supersized interest rate hike to help tamper inflation

The Bank of Canada is expected to announce another oversized interest rate increase this week, part of its effort to push Canadian borrowing costs rapidly higher in the hope of slowing the pace of consumer price growth.

The central bank is in the middle of its fastest rate hike cycle in decades. After keeping its benchmark interest rate near zero for two years, the bank’s governing council announced back-to-back rate hikes in March and April – the second being an unusually large half-percentage-point move.

Bay Street forecasters widely expect the bank to follow up with another half-point move on Wednesday. That would bring the bank’s benchmark rate up to 1.5 per cent, just a quarter point below the prepandemic level.

How central bankers lost their grip on inflation

A succession of supersized moves would be extraordinary by historical standards. Before the April rate hike, the central bank had not announced a half-point increase for two decades. It typically moves in quarter-point increments.

But Canada’s central bankers seem to be feeling a sense of urgency. The annual rate of inflation hit a new 31-year high of 6.8 per cent in April – more than three times the bank’s 2-per-cent target – and forecasters expect the consumer price index to keep pushing higher in the coming months as a result of surging oil and other commodity prices.

Inflation is also broadening out to a wider range of goods and services, making it harder for Canadians to avoid. And it is increasingly being driven by domestic factors.

“We are confronted with an economy that is showing clear signs of overheating, very tight labour markets and this perfect inflationary storm of global events and preference shifts [in consumer spending],” Bank of Canada deputy governor Toni Gravelle said in a speech earlier this month.

“Simply put, with demand running ahead of the economy’s capacity, we need higher interest rates to cool domestic inflation.”

Central bank officials have said they intend to get the benchmark rate to a “neutral” position – meaning an interest rate level that neither stimulates nor holds back the economy – of between 2 per cent and 3 per cent relatively quickly. Whether the bank stops there or keeps pushing higher will depend on how the economy reacts to higher borrowing costs. In this, the bank will be paying particularly close attention to the housing market.

There are already signs that the real estate sector is slowing in response to interest rate increases. The number of home sales across the country fell 12.6 per cent from March to April on a seasonally adjusted basis, while the home price index slid 0.6 per cent, according to the Canadian Real Estate Association.

“Anyone with a variable rate mortgage should understand what their payment will be with a 50-basis-point increase next week, and they should budget for additional rate increases totalling 1-2 per cent for the remainder of the year,” James Laird, co-founder of Ratehub.ca and president of CanWise Financial, a mortgage brokerage, said in an e-mailed statement.

“Fixed rates have already increased by 1.75-2 per cent, because bond yields have been pricing in the anticipated Bank of Canada rate increases,” he added.

Mr. Gravelle warned in his speech that interest rate increases could have a greater impact on the Canadian economy than they did in the past “because highly indebted households will face high debt-servicing costs and will likely reduce household spending more than they would have otherwise.”

Housing market concerns could play a bigger role in the Bank of Canada’s decision-making as it gets farther along in its rate hike cycle. For now, however, the bank’s main task is sounding tough on inflation, according to Andrew Kelvin, chief Canada strategist at Toronto Dominion Bank.

“If the bank spends too much time focusing on the headwinds facing the economy (slower housing activity, crumbling consumer confidence), markets may come to believe that the bank is unwilling to bring inflation under control, causing inflation expectations to become unanchored and requiring a more painful tightening cycle,” he wrote in a note to clients.

There was some earlier speculation that the bank might move more than 50 basis points this week. But Bank of Canada Governor Tiff Macklem seemed to rule this out in an appearance before Parliament last month, saying that such a move would be “very unusual.”