Tausi Insider

A person shops at a grocery store in Glenview, Ill., on July 4. Nam Y. Huh/The Associated Press Price increases moderated in the United States last month in the latest sign that the inflation pressures that have gripped the nation might be easing as the economy slows and Americans grow more cautious. Consumer inflation reached 7.7 per cent in October from a year earlier and 0.4 per cent from September, the government said Thursday. The year-over-year increase, down from 8.2 per cent in September, was the smallest rise since January. A separate gauge called core inflation, which excludes volatile food and energy, rose 6.3 per cent in the past 12 months and 0.3 per cent from September. The numbers were all lower than economists had expected. Helping drive the inflation slowdown from September to October were used car prices, which dropped for a fourth straight month. Prices of clothing and medical care also fell. Food price increases slowed. By contrast, energy prices rebounded in Octo...

The economic update that was meant to shed light on how Canada will compete with new clean-spending measures in the United States and elsewhere has instead sowed confusion about one of the key elements of that strategy. Last spring, the federal government announced that it was exploring carbon contracts for differences (CCFDs). As presented then, the mechanism would guarantee companies making clean-technology investments of financial benefits from planned carbon-price increases, even if the price did not actually go up to $170 per tonne by 2030 as planned. Since August, when Washington committed US$370-billion to climate-related measures via the Inflation Reduction Act, Ottawa has faced increased pressure to follow through. Prime Minister Justin Trudeau has suggested that Canada’s national carbon price means it doesn’t need to match subsidies in the U.S. But Canadian industries have complained that political uncertainty around the market-based mechanism – including whether it will be...

Romaine lettuce in Simi Valley, Calif., in 2018. Wholesale produce distributors say demand is exceeding supply of iceberg and romaine lettuce. Mark J. Terrill/The Associated Press The cost of lettuce is spiking amid a shortage that’s leading some restaurants to temporarily stop offering leafy greens on their menus. Wholesale produce distributors say demand is exceeding supply of iceberg and romaine lettuce, and pricing pressures are expected to continue throughout the month. Restaurants Canada COO Kelly Higginson said a major lettuce-growing area in California was hit by some kind of virus, after a year that’s already been rife with difficulties thanks to heat and drought. “That particular area has had crops decimated. So there’s a massive shortage,” said Higginson. From fast-food joints to fine dining establishments, “everybody’s just pulling lettuce off the menu,” she said. That’s because not only is lettuce in short supply, but the available product has in some cases quadrupled in...

Canada’s housing downturn decelerated in October, with home sales rising slightly and prices levelling out. But the volume of activity was depressed and economists warned that home prices would continue to fall as borrowing costs soar. The number of resales rose 1.3 per cent from September to October, according to the Canadian Real Estate Association (CREA). That was the first rise in monthly sales since February, when Canada’s central bank was about to embark on its campaign to slash the supply of cheap money. At the same time, the national home price index fell 1.2 per cent to $777,200 from September to October after removing seasonal influences, according to CREA. That was the smallest monthly drop since June, though the eighth consecutive month of price declines. Over all, October’s activity was 15 per cent below the prepandemic monthly average. Bank of Montreal senior economist Robert Kavcic described the Canadian housing market as depressed and forecast further price decreases ...

Canadian home prices dropped in October from the previous month, though less sharply than in September, while year-over-year price gains continued to slow, Teranet–National Bank National Composite House Price data showed on Friday. The index, which tracks repeat sales of single-family homes in major Canadian markets, dropped 0.8 per cent on the month, led by sharp declines in Halifax, Nova Scotia and Hamilton, Ontario. The major market index is now 7.7 per cent below the May peak, with Hamilton down 15.9 per cent and Halifax down 14 per cent. Calgary and Edmonton, Alberta, by contrast, both hit fresh highs in October. Prices are still higher than a year ago, up 4.9 per cent from October 2021, but gains continued to slow. The Teranet index tracks closings, so it typically lags realtor sales data by three to five months. https://www.tausiinsider.com/canadian-home-price-index-slides-again-in-october/?feed_id=334798&_unique_id=6483e705abb0b

The Canadian dollar CADUSD weakened against its U.S. counterpart on Friday, with the currency adding to this week’s decline as oil prices fell and data showed the largest divestment of Canadian securities by foreign investors in nearly four years. The price of oil, one of Canada’s major exports, was on track for a second weekly decline, pressured by concern about weakening demand in China and further interest rate rises by the U.S. Federal Reserve. U.S. crude prices fell 3.7 per cent to $78.62 a barrel, while the Canadian dollar was trading 0.3 per cent lower at 1.3360 to the greenback, or 74.85 U.S. cents. It traded in a range of 1.3301 to 1.3368. For the week, it was on track to decline 0.8 per cent, after four straight weeks of gains. Foreign investors sold a net C$22.3-billion ($16.7-billion) in Canadian securities in September, led by federal government bonds, following a revised C$26.2-billion total purchase in August, Statistics Canada said. This was the largest divestment sin...

The Canadian CADUSD dollar weakened to its lowest level in 11 days against its U.S. counterpart on Monday as rising COVID-19 cases in China weighed on investor sentiment and speculation that OPEC would increase output led to volatility in the price of oil. The loonie was trading 0.4% lower at 1.3440 to the greenback, or 74.40 U.S. cents, after touching its weakest intraday level since Nov. 10 at 1.3495. “It’s predominantly being driven by exogenous factors,” said Bipan Rai, North America head of FX strategy at CIBC Capital Markets. “We see the (U.S.) dollar up across the board; including against the Canadian dollar.” The safe-haven U.S. dollar advanced against a basket of major currencies, recouping some recent losses, as fresh COVID-19 curbs in China fuelled worries over the global economic outlook and made traders shun riskier currencies. The price of oil, one of Canada’s major exports, whipsawed as reports varied about whether Saudi Arabia and other OPEC oil producers are consider...

The Canadian dollar CADUSD weakened on Wednesday against its U.S. counterpart and all the other G10 currencies as oil prices fell and ahead of a parliamentary appearance by Bank of Canada Governor Tiff Macklem. The price of oil, one of Canada’s major exports, declined as the Group of Seven (G7) nations looked at a price cap on Russian oil above where the crude grade is currently trading. U.S. crude prices were down 3.1 per cent at $78.43 a barrel. Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers will appear before the House of Commons Standing Committee on Finance at 4:30 p.m. ET (2130 GMT). On Tuesday, Rogers said that higher interest rates are starting to slow the Canadian economy, putting pressure on households with elevated debt and people who recently bought a home with a variable-rate mortgage. To reduce inflation pressures, Canada’s central bank is aiming to slow demand so that supply can catch up. But spending on affordability measures by federal...

Benchmark Brent oil edged lower on Thursday while West Texas Intermediate (WTI) crude held steady, hovering in sight of two-month lows as the level of a proposed G7 cap on the price of Russian oil raised doubts about how much it would limit supply. A bigger-than-expected build in U.S. gasoline inventories and widening COVID-19 controls in China also added downward pressure on crude prices. Brent crude futures were down 29 cents, or 0.3%, to $85.12 a barrel by 15.15 p.m. ET (2015 GMT), while U.S. WTI crude futures rose 2 cents, to $77.96. Trading volumes were thin because of the Thanksgiving holiday in the United States. Both benchmarks plunged more than 3% on Wednesday on news the planned price cap on Russian oil could be above the current market level. European Union governments remained split over what level to cap Russian oil prices at to curb Moscow’s ability to pay for its war in Ukraine without causing a global oil supply shock, with more talks possible on Friday if positions c...

Belgian Minister of Energy Tinne Van der Straeten attends an EU energy ministers meeting, in Brussels, on Nov. 24. JOHANNA GERON/Reuters On winter’s doorstep, European Union nations again failed to bridge bitter disagreements over a natural gas price cap Thursday as they struggle to effectively shield 450 million citizens from massive increases in their utility bills. An emergency meeting of energy ministers only showed how the energy crisis tied to Russia’s war in Ukraine has divided the 27-nation bloc into almost irreconcilable blocs. “The discussion was quite heated, and you all know that there are very divergent views,” said Czech Industry Minister Jozef Sikela, who chaired the meeting where ministers could not agree on when and how a price cap on gas purchases should kick in. A massive August spike in natural gas prices stunned all but the wealthiest in Europe, forcing the bloc to look for a cap to contain volatile prices that are fuelling inflation. But the EU is deadlocked bet...

The Canadian dollar CADUSD gained slightly against its broadly weaker U.S. counterpart on Thursday after the Federal Reserve sent a dovish signal on the pace of interest rate hikes and as oil prices steadied. The loonie was up 0.1% at 1.3340 to the greenback, or 74.96 U.S. cents, in a quiet North American session with U.S. markets closed for Thanksgiving. The currency traded in a range of 1.3317 to 1.3362. “The USD tone remains defensive,” Shaun Osborne, chief currency strategist at Scotiabank, said in a note. The greenback swooped towards a three-month low against a basket of major currencies and world shares touched a two-month high after minutes from the Fed’s latest meeting, released on Wednesday, pointed to a slower pace of U.S. rate rises from next month. The Bank of Canada has already downshifted the pace of its rate increases but is likely not done yet with tightening. Money markets are pricing in a 25 basis point move at the next policy decision on Dec. 7. “Resilient growth,...

People walk past the Europa-Center shopping mall, in Berlin, on Dec. 14, 2020. MICHELE TANTUSSI/Reuters The German economy grew slightly more in the third quarter than suggested by preliminary figures on the back of consumer spending, adding to signs that a coming recession will not hit as hard as initially feared, data showed on Friday. Europe’s largest economy expanded by 0.4 per cent quarter on quarter and by 1.3 per cent on the year, adjusted for price and calendar effects, the federal statistics office said. Analysts polled by Reuters had expected the economy to grow by 0.3 per cent on the previous three months and by 1.2 per cent annually. Household spending was the main reason for the increase, as consumers travelled and went out more after nearly all pandemic restrictions had been lifted. “It’s by no means a foregone conclusion that the third quarter’s GDP growth marks the end of positive growth rates for the time being,” said VP Bank chief economist Thomas Gitzel, who added ...

The Canadian dollar CADUSD weakened against its U.S. counterpart on Friday, giving back its weekly gain, as oil prices fell and the greenback gained ground against a basket of major currencies. The loonie was trading 0.3% lower at 1.3380 to the greenback, or 74.74 U.S. cents, in a quiet session for North American financial markets after the U.S. Thanksgiving holiday. The currency moved in a range of 1.3318 to 1.3398. For the week, it was nearly unchanged. The U.S. dollar rose but remained near multi-month lows as investors weighed prospects of the Federal Reserve moderating the pace of its policy tightening. The Bank of Canada has also been raising interest rates. Canadian third-quarter GDP data and the November employment report, due next week, could guide expectations for the pace of additional tightening. The price of oil, one of Canada’s major exports, settled 2.1% lower at $76.28 a barrel, closing a week marked by worries about Chinese demand and haggling over a Western price ca...

Oil tanks at the Volodarskaya LPDS production facility, in the Russian village of Konstantinovo, on June 8. MAXIM SHEMETOV/Reuters The global oil market is signaling a potential shift, as traders and analysts worry about reduced crude demand and an oversupplied market in the coming months. After months of strength, crude futures are flirting with lows not seen all year as top oil consumer China enters additional COVID-19 lockdowns while central banks hike interest rates to combat inflation. Front-month global oil prices in the last week have traded weaker than future-dated contracts, while prices for physical crude grades throughout the world have declined, market participants said. “Differentials are confirming what outright prices have been implying – there is a demand deficit and/or supply surplus,” said Tamas Varga of oil broker PVM. The murkier environment comes at a fraught time for the market. On Dec. 5, a European Union ban on Russian crude imports is set to start, along with...

Fred Lum/the Globe and Mail If houses are investments, then they’re subject to the harsh math of investing losses. However much an asset falls in price, it has to rise by a larger percentage just to get back to the starting point. The national average resale home price peaked at $816,720 in February and has since fallen a bit more than 21 per cent to $644,463 in October. To get back to the peak, we need the average price to rise by almost 27 per cent. Figure on it taking between four and five years to do that, if prices bounce back enough to revive the toxic idea that houses are investments. Treating houses as investments means the death of affordability. The longer prices decline or flatline, the more opportunity there will be for home ownership to remain a viable middle-class goal. Still, the investment mentality is a big reason why our housing market overheated. Attention must be paid. What houses have going for them as investments is a decades-long history of price appreciation t...

European Commissioner for Energy Kadri Simson speaks to reporters at the EU headquarters, in Brussels, on Nov. 24. KENZO TRIBOUILLARD/AFP/Getty Images The European Union’s energy chief on Wednesday defended the bloc’s proposal to cap gas prices and said countries will negotiate possible changes to the proposal, after a backlash from EU member states. After months of infighting among EU countries who disagree on whether to cap energy costs, the European Commission last week proposed a price cap that would kick in if the front-month Title Transfer Facility gas price exceeded 275 euros per megawatt-hour for two weeks and was 58 euros higher than a liquefied natural gas reference price for 10 days. The EU proposal came under fire from countries in favour of a gas price cap to reduce citizens’ high energy bills – with Poland’s energy minister calling the proposal “a joke” and analysts suggesting it was designed with such strict criteria that it would never be used. “This was not our aim, ...

European Union governments tentatively agreed on Thursday on a $60 a barrel price cap on Russian seaborne oil - an idea of the Group of Seven (G7) nations - with an adjustment mechanism to keep the cap at 5% below the market price, according to diplomats and a document seen by Reuters. The agreement still needs to be approved by all EU governments in a written procedure by Friday. Poland, which had pushed for the cap to be as low as possible, had as of Thursday evening not confirmed if it would support the deal, an EU diplomat said. EU countries have wrangled for days over the details of the price cap, which aims to slash Russia’s income from selling oil. The initial G7 proposal last week was for a price cap of $65-$70 per barrel with no adjustment mechanism. Since Russian Urals crude already traded lower, Poland, Lithuania and Estonia rejected that level as not achieving the main objective of reducing Moscow’s ability to finance its war in Ukraine. “The price cap is set at $60 with...

U.S. consumer spending increased solidly in October, while inflation moderated, giving the economy a powerful boost at the start of the fourth quarter as it navigates a high interest rate environment. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, jumped 0.8 per cent after an unrevised 0.6 per cent increase in September, the Commerce Department said on Thursday. October’s gain was in line with economists’ expectations. Spending last month was boosted by wage gains amid labour market resilience, one-time tax refunds in California, which saw some households receiving as much as $1,050 in stimulus checks, and cost of living adjustments for food stamp recipients. The Federal Reserve is in the midst of what has become the fastest rate-hiking cycle since the 1980s, as it battles high inflation, raising the risks of a recession next year. Fed Chair Jerome Powell said on Wednesday the U.S. central bank could scale back the pace of its rate increases “as...

The Calgary Real Estate Board says the city’s November home sales dipped by more than 20 per cent since the same time last year, but 2022 is still on track to set a record. The Alberta board says last month’s sales amounted to 1,648, down 22 per cent from a year ago, but 12 per cent above the 10-year average. Despite the pullback seen over the last six months, year-to-date sales remain nearly 10 per cent above last year’s record high. The year-to-date sales growth is largely attributable to a surge in condo and row house sales. November’s sales decline was coupled with a 20 per cent drop in new listings since the same time last year and an inventory level not seen since November 2005. Meanwhile, the benchmark price rose about nine per cent to $520,200 and the average price rang in at $490,134, a less than one per cent fall from a year ago. https://www.tausiinsider.com/calgary-home-sales-down-20-in-november-year-to-date-sales-on-track-for-record-real-estate-board/?feed_id=331414...

The Group of Seven nations and Australia joined the European Union on Friday in adopting a $60-per-barrel price cap on Russian oil, a key step as Western sanctions aim to reorder the global oil market to prevent price spikes and starve President Vladimir Putin of funding for his war in Ukraine. Europe needed to set the discounted price that other nations will pay by Monday, when an EU embargo on Russian oil shipped by sea and a ban on insurance for those supplies take effect. The price cap, which was led by the G-7 wealthy democracies, aims to prevent a sudden loss of Russian oil to the world that could lead to a new surge in energy prices and further fuel inflation. U.S. Treasury Secretary Janet Yellen said in a statement that the agreement will help restrict Putin’s “primary source of revenue for his illegal war in Ukraine while simultaneously preserving the stability of global energy supplies.” The agreement comes after a last-minute flurry of negotiations. Poland long held up an ...