Weekly Economic Update

For the week of August 20 – 24.

According to Statistics Canada, the Consumer Price Index in July had a strong gain of 3 percent year over year, beating expectations of 2.5 percent. The Headline CPI was also up 0.5 percent month over month versus estimates of 0.1 percent. Energy, travel services, and mortgage interest cost categories led the gains: gasoline prices were up 25.4 percent, airline tickets were up 28.2 percent in the past year, and interest rates for mortgages were 5.2 percent higher. Natural gas (-5.7 percent), telephone services (-5.1 percent), and traveller accommodation (-4.1 percent) led the price declines in July. The largest upside and downside contributor to monthly inflation was the recreation/education category and clothing/footwear category, respectively. Inflation expanded the fastest since 2011, which suggests Canada’s retaliatory tariffs had little impact on July CPI gains.

iStock-508730131.jpgInternational investors bought $11.5 billion of Canadian securities in June, including a total of $11.7 of Canadian bonds. Meanwhile, Canadian investors had their largest investment in foreign securities since January 2018, adding $11.3 billion to their portfolios. As a result, international transactions in securities generated a net inflow of $256 million into the economy in June.

This week will be relatively quiet for Canada and US economic releases. We have wholesale trade sales and retail sales data coming out in the middle of the week. In the US, we have existing home sales, August 1st FOMC meeting minutes, Markit PMI data, and durable goods data to be released this week. The focus will be on central bank speak from Jackson Hole on Thursday and Fed Chair Powell’s keynote speech on monetary policy in a changing economy on Friday.

Both US and Canada government yields are trading flat to 1bps lower with S&P futures higher (+6.6). The Canadian dollar is currently trading 1.3071 against the US dollar, todays expected range is 1.3021 – 1.3121.

 

Weekly Economic Update

For the week of August 13 – 17.


iStock-147680107_path into redwood trees_edited.jpgAccording to Statistics Canada, employment rose 54.1K in July from 31.8K in prior month, beating economists’ estimated gain of 17K in employment. The majority of the gain came from part-time employment (+82K), followed public employment (+50k). Full-time employment fell 28K, vs. last month’s gain of 9K, while private employment rose 5.2K in July. Average hourly wages came in lower at 3 percent, from 3.5 percent in June. Canada’s unemployment rate came in a smidge lower than estimate, at 5.8 percent vs. 5.9 percent in June, which is now tied for its lowest level since the 1970s. The unemployment rate in Ontario hit 5.4 percent, matching the lowest rate on record since 2000.

Consumer prices in the United States came in line with expectations on a month-over-month basis and year-over-year basis in July, at 0.2 percent and 2.9 percent, respectively. Weakness in energy was a drag to the headline CPI increase relative to the core CPI. The decline in electricity (-1.4%) and utility gas service (-1.7%) more than offset rising gasoline inflation (0.5%).

Contagion spreading to euro area lenders were a concern last week, after the Financial Times reported that the European Central Bank is becoming concerned about the exposure of some of the region’s banks to Turkey. Turkey’s currency, the Lira, plunged as much as 13.5 percent last Friday. Subsequently, the US plans to double tariffs on Turkish steel to 50 percent, and raise the rate on aluminum to 20 percent. President Erdogan said Turkey was in an ‘economic war’ while ruling out higher interest rates to stem the Lira’s losses or seeking an international bailout.

Scheduled releases in Canada this week include existing home sales, manufacturing sales and consumer price index data. Schedule releases in the US this week include import and export price index, retail sales, various manufacturing figures, and readings for the University of Michigan’s Sentiment. 

Both US and Canada government yields are trading flat to 1bp lower with S&P futures lower (-3.5). The Canadian dollar slid to its weakest level against the dollar since July 24, as haven currencies outperform on fears of Turkey crisis. Today’s expected range of Canadian dollar is 1.3105 – 1.3205.

 

Weekly Economic Update

For the week of July 23 – 27.shutterstock_721776619

It was a strong day for Canadian economic releases on Friday last week. Both retail sales and consumer prices data blew past expectations, and the Canadian dollar shared in the strength. Following the releases on Friday morning, the Canadian dollar strengthened against the US dollar by over one percent. Unsurprising, markets expectations for rate hikes over the upcoming three meetings increased on Friday slightly.

Retail sales grew by two percent for the month of May, twice as much as the one percent growth that was expected, and a drastic improvement from the 0.9 percent drop that was seen in April. Excluding autos, sales growth was closer to 1.4 percent (against expectations of a lesser 0.5 percent). The details of the release show that growth was seen in ten out of eleven measured sub-sections, with the largest upside contribution coming from new car dealers. The lone decline came from the supermarkets section.

Not to be outshined, consumer prices also beat expectations, growing by 0.1 percent and 2.5 percent on a month-over-month and year-over-year basis respectively. Expectations for the two measures were zero percent and 2.3 percent. Growth of 2.5 percent year-over-year marks the fastest acceleration seen since 2012. The largest upside contributor this month was transportation costs, while the largest drag was seen from the recreation and education category.

The Canadian dollar is trading relatively flat against the US dollar this morning. Today’s expected range is 1.3088 – 1.3188.

 

You’ve been named executor. Now what? A 6 step guide to estate administration.

shutterstock_90567055Being named executor for an estate is both an honour and a responsibility. It means that while grieving the loss of a loved one, you also have the obligation to make sure their last wishes are fulfilled.

It can be difficult to get started, and it’s worth taking some time to research the steps involved in administering an estate.

There are SIX main activities related to estate administration you will need to address as executor (although not all activities within each step may apply to you):

Step 1
Locate the Will. Common places to look include safety deposit boxes, personal files, or a home safe. It could also be on file with a professional advisor such as Concentra Trust, a financial advisor, an accountant or lawyer.

Step 2
Make funeral arrangements. There are many decisions to make when arranging a funeral, usually in a short time period. Regardless of instructions or wishes from either the deceased or their family members, as executor, you are ultimately responsible for funeral arrangements.

Step 3
Protect the estate. This includes rerouting mail, ensuring any vacant property is properly insured, notifying financial institutions, advertising for creditors, and safekeeping any valuables.

Step 4
Inventory assets and liabilities. This is required for the probate application and may include contacting government agencies, such as the CRA and Service Canada, locating property titles, valuing assets, as well as notifying lenders and credit card companies. Once the statement of assets and liabilities is completed, you’ll need to provide a copy to the beneficiaries.

Step 5
Complete the Probate application. Probate is commonly required when real property is held solely in the deceased’s name. Probate may also be required by a financial institution. There are three ways you can complete a probate application: do it yourself; have a lawyer complete it; or call Concentra Trust.

Step 6
Distribute estate assets. You will need to file the required tax returns to receive a CRA Clearance Certificate. You will then be able to prepare a final report for the beneficiaries. The beneficiaries must approve the report, your executor’s fee, and sign a release before you can distribute the estate assets and close the estate account.

Since some of these steps are complex, it can be wise to enlist the help of a professional. Our experienced advisors offer executors advice and guidance through the entire estate process. You may only need a little advice, or you may want a complete solution. Our expert team is professional, compassionate, and knowledgeable. And we’re here to help.

Joan McAulay
Senior Personal Trust Specialist
Concentra Trust

For a no cost, no obligation consultation with an estate specialist, call 1-800-788-6311 #1888 or email executorease@concentra.ca.

This information cannot be considered to be legal, tax, real estate or financial planning advice, nor replace professional advice, but can serve as a helpful reference.

 

Weekly Economic Update

For the Week of May 28 – June 1

US durable goods orders declined more than expected in April, falling 1.7 percent versus consensus expectations of a 1.3 percent decline. The decline was concentrated in transportation. Excluding transportation, orders were up 0.9 percent and the increase was fairly broad-based, spanning computers, electrical equipment and metals; however orders for machinery fell another 0.8 percent following a 3.2 percent drop the month prior. Analysts believe that durable goods orders may be reaching a plateau with the level of activity leveling out.

The final print of the University of Michigan Sentiment gauge for May was a bit lower than expectations with a reading of 98.0 versus expectations of 98.8. The latest reading marks a four-month low as consumers wade through less favourable buying conditions for homes and big-ticket items. The current conditions gauge, which measures American’s perceptions of their finances, fell to 111.8 from 114.9 in April. However, the expectations measure improved to a three-month high at 89.1 from April’s 88.4.

There are two main releases for Canada this week – GDP figures and the Bank of Canada’s rate decision. Consensus expectations are for first quarter GDP to have accelerated to a 2.0 percent annualized pace from 1.7 percent in the fourth quarter of last year. Meanwhile, the Bank of Canada is scheduled to announce its rate decision on Wednesday. Consensus is that the Bank will hold rates steady at 1.25 percent. A few manufacturing releases are also scheduled this week. In the US, GDP figures will also be released along with the employment report, various housing numbers and ISM manufacturing.

The Canadian dollar is trading flat to slightly down from Friday’s market close. Today’s expected trading range is 1.2936 – 1.3036.

Source: Bloomberg

Weekly Economic Update

For the week of April 23 – 27

Canadian headline inflation increased 2.3 percent year-over-year in March, which was 0.1 percent lower than consensus expectations but 0.1 percent higher than February’s figure. The average of the core measures came in at 2.00 percent, just shy of the 2.03 percent recorded in February. On a monthly basis, headline inflation was up 0.3 percent. The largest upside contributor to the monthly figure was the recreation and education category, adding 0.22 percentage points while the largest downside contributor was the household operations category, subtracting 0.22 percentage points.

Canadian retail sales matched consensus expectations in February, increasing 0.4 percent month-over-month to $49.8 billion. However, excluding autos, sales were flat to January’s figures with the new car dealers category driving sales for the month of February, contributing 0.39 percentage points to overall sales which happen to be the largest upside contributor to overall retail sales. The largest downside contributor was the gas stations categories, subtracting 0.10 percentages points. Of the 11 subsectors of retail sales tracked by Statistics Canada, four experienced an increase. These four categories represent 47 percent of all retail trade.

Scheduled data releases this week for Canada will be very light. The only major scheduled release this week is the February wholesale trade sales figure. Consensus expectations are for sales to increase by 0.7 percent after January’s 0.1 percent increase. There will be a lot more data releases in the US. Scheduled releases include housing figures, manufacturing numbers, sentiment gauges and GDP. The first print of first quarter GDP is expected to come in at an annualized rate of 2.0 percent, down from the final print of fourth quarter GDP of 2.9 percent.

The Canadian dollar is down a bit more against the US dollar from Friday’s market close. The loonie is down about a cent from Friday morning after Canadian CPI figures came in slightly lower than forecast. Today’s expected trading range is 1.2730 – 1.2830.

Source: Bloomberg

Weekly Economic Update

For the week of March 6 – 10.

Fed Chair Janet Yellen seems to have confirmed that the Fed will be raising interest rates in March; speculators have the rise’s probability at 96%. Yellen said that assuming employment and inflation are still in line with the central bank’s expectations, an adjustment to the overnight rate will be appropriate in March. Yellen also stated that rate adjustments will be less gradual than in the past. Fed Vice-Chairman Stanley Fischer echoed his support of a rate hike: “there is almost no economic indicator that has come in badly in the last three months.”

China’s National People’s Congress announced a 2017 growth target of “around 6.5% or higher if possible,” compared to last year’s range of 6.5% – 7.0%.

Data releases in Canada this week will include international merchandise trade, housing starts, and employment. Friday’s employment release will follow a posting of 48.3K in January which was made up of 15.8K full-time positions and 32.4K part-time positions.

In the United States this week, releases are expected for factory and durable goods orders, trade balance, ADP employment change, wholesale inventories, and employment. Friday’s Nonfarm data release will be under close scrutiny leading into the March 15 Fed policy meeting, where investors are expecting the first rate hike of the year.

Source: bloomberg

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Weekly Economic Update

For the week of February 13-18

The Canadian economy continued to surprise economists in January by adding 48.3K positions, nearly 60K more than expected; however, the underlying details are not as strong as last month’s results. Full time employment was increased by 15.8K positions, while part-time positions increased by 32.4K. The unemployment rate in Canada dropped to 6.8% from 6.9% and the participation rate bumped up slightly to 65.9.Gains were led by an increase in demand for individuals in the business and financial services.

shutterstock_90567055A monthly report released by the Energy Information Administration on Friday gave a bit more insight into the OPEC production cut and the oil market in general. According to the report, OPEC compliance to the most recent production cut is currently at approximately 90%, with Saudi Arabia cutting further than they had committed to. Another positive from this report was the indication of increasing demand, which will assist in closing the supply and demand gap. The International Energy Administration sees demand for oil increasing by 1.4 million barrels per day in 2017. Oil prices are currently down by 0.39%.

It will be an extremely quiet week for economic data in Canada with the only notable releases falling on Wednesday and Friday: manufacturing sales and international securities transactions respectively. The United States is expecting a busier week with data releases coming for PPI final demand, Empire manufacturing, consumer prices, retail sales, industrial production, and housing starts.

The Canadian dollar is trading more or less in line with the U.S. dollar this morning. Today’s expected range is 1.3049 – 1.3149.

Source: bloomberg.

Weekly Economic Update

For the week of February 6 – 11

After a relatively slow month for data in Canada, we will see a pick-up in releases this week. Data will be released for international merchandise trAnalyzing electronic documentade, building permits, housing starts, and employment. Markets will be keen to see how the Canadian economy will follow up in January to the 46.1K increase in new positions we saw in December. In the United States this week, releases are expected for the trade balance, wholesale inventories, and University of Michigan sentiment.
Headline non-farm payrolls data was dulled by a weaker than expected posting for the unemployment rate and hourly earnings on a month-over-month and year-over-year basis. The U.S. economy added 227K new positions in January, beating expectations by nearly 50K and rising 70K from December. However, the unemployment rate ticked up to 4.8% from 4.7%, and hourly earnings growth dropped to 2.5% on a year-over-year basis from 2.9% in December. The U.S. dollar went from gains to losses against the Canadian dollar on release of these figures.

Daniel Atkinson, Head of the oil industry and markets division at the International Energy Administration expressed his belief that oil prices will not likely reach a level of $65 per barrel any time soon, even with OPEC’s recent production cut. Mention was made of increasing prices leading to a bump in U.S. shale production which once again brings the supply side of the equation higher. Despite this somber outlook for the price of oil, Atkinson believes that compliance by OPEC members has been solid. Oil prices are currently up by a modest .17%. The Canadian dollar is down against the U.S. dollar this morning. Today’s expected range is 1.2994 – 1.3094.

Source: bloomberg.com