First Look With Surveillance: China Zero, Trump Troubles
The Canadian labour market finally faltered in May, shedding 17,300 jobs to post the first decline since last August. That missed expectations for a gain of 21,300 jobs, though it is worth noting that there’s a reasonably significant confidence interval to these numbers, so that spread isn’t quite as wide as it seems at first glance. The unemployment rate rose 0.2 per cent to 5.2 per cent – also the first increase since August – but it’s the composition to things that catches the eye: employment among youth aged 15-24 fell by 77,000 positions, offsetting gains for older workers. In any case, that 17,300 drop doesn’t even offset the gains we saw in April, so it’s not as if the sky is falling on the labour market, and the Bank of Canada will likely need a whole lot more evidence that its policies are cooling the labour market before changing its tune.
BEAUDRY WARNS HIGHER RATES MAY BE LOSING THEIR BITE
Bank of Canada Deputy Governor Paul Beaudry is flagging the central bank’s concerns that higher interest rates may not be having the same magnitude of an impact than we’ve seen in the past. In a speech yesterday, Beaudry said the BoC hiked earlier this week due to concerns inflation could get somewhat jammed above the two per cent target rate, as higher rates haven’t sufficiently dampened household demand. For central bank watchers, it’s of note that he also said the so-called neutral rate – where rates neither constrain economic activity nor add fuel to the fire – may be higher than the Bank of Canada originally thought, which could be a harbinger for higher-for-longer rates.
BROOKFIELD STRIKES £2.2B CARD PROCESSING DEAL
Brookfield Asset Management is back on the acquisition trail, announcing plans to snap up Network International Holdings for £2.2 billion. The deal has Brookfield essentially doubling-down on credit card processing in the Middle East – Brookfield says it sees some strategic logic in combining Network’s operations with Magnati, the payments business it took control of last year from First Abu Dhabi Bank. Brookfield is pretty active, overall, in the Middle East, where it manages about US$8 billion in assets.
OTHER NOTABLE STORIES
- UBS is sealing the deal with the Swiss government to cover US$9.9 billion in losses it could potentially incur from its rescue of Credit Suisse, the last major hurdle to closing the transaction.
- -Notable data: Employment Report, Capacity Utilization, U.S. Quarterly Services Survey