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Daily Pulse

Canada

Canadian heavy crude prices rallied Friday as U.S. refinery demand rises and increased volumes are shipped by rail car. Heavy Western Canadian Select's discount to West Texas Intermediate futures narrowed to $39.25 a barrel, the smallest since late September, data compiled by Bloomberg show. The absolute price increased to $17.43 a barrel after dropping on Thursday to the lowest in Bloomberg data stretching back a decade.

Canada's once-lofty housing market is achieving a best-case soft landing for policy makers trying to cool things down without triggering a collapse. The latest string of data indicates the market is experiencing only a modest adjustment in prices in the face of higher interest rates and tougher regulations brought in to tackle a boom that saw values more than double in Toronto and Vancouver since 2009.

United-States

Expect the broad dollar to decline in 2019 as the U.S. growth boom "catches down" to the moderate pace of expansion in the rest of the world, Goldman Sachs analysts wrote. Wouldn't rule out modest additional dollar gains to close out 2018 or in early 2019 as firm domestic growth, continued rate hikes by the Fed, weakness in economic activity abroad and a sizable draw-down of risky assets trends may continue a while longer. Several changes to the global economic backdrop which, combined with a few negative mediumrun factors, point to more downside than upside to the broad USD in 2019. Euro has room for appreciation, but only on a resolution or containment of the budget standoff in Italy; until then, risks are skewed to the downside.

Colfax Corp. agreed to buy DJO Global Inc. from private equity giant Blackstone Group LP for $3.15 billion in cash to gain a foothold in the lucrative market for orthopedics devices.

The S&P 500 has bounced nearly 4 percent since its low point on Oct. 29, but both the Information Technology and Communication Services sectors have lagged behind (up 1.7% and up 2.6% in that time span, respectively). Apple is the weakest in the Dow since that day with a near 9% slide and a concerning break below its 200-day moving average, while Facebook closed on Friday at 52-week lows as new scandals have moved Cambridge Analytica further into the rear view.

Europe

European Commission President Jean-Claude Juncker said he thinks the U.K. and the European Union are tiptoeing closer to a definitive Brexit deal that will be concluded in the coming weeks. "Brexit is a tragedy for Europe, we mustn't add to that the drama of a disorganized departure," he told France 24 television in an interview broadcast on Sunday.

European equities just can't seem to catch a break as Renault SA's plunge following misconduct allegations against its leader trimmed the stock market's earlier gains.

Asia

Japan's monthly exports data showed a clean recovery from a string of natural disasters, even if the longer-term outlook remains clouded by trade-war risks and easing demand in China. The value of shipments abroad rose 8.2 percent in October from a year earlier, broadly in line with a forecast 8.9 percent gain, according to the Ministry of Finance. The figures released Monday revised the decline in September to a drop of 1.3 percent.

The author

Michel Doucet

Michel Doucet

Vice-President and Portfolio Manager
After obtaining a Bachelor's degree from the Faculty of Social Sciences at the Université du Québec in Montréal and his Master’s degree, Michel Doucet began his career as a junior economist at the National Bank head office in Montreal. In 1992 he joined the institutional equities and fixed income group at Lévesque Beaubien Geoffrion as an economist and market analyst. Over the years, he has led various projects related to the North American and international economies as well as Canadian public finances. In 1996, the team of institutional economists to which he belongs was ranked first in Canada by Brendan Wood International. In August 1997, Mr. Doucet joined the personal services division of Lévesque Beaubien Geoffrion where he served as an economist, fixed income market analyst and vice president. In 2004, he joined the Desjardins Securities full service team as Vice President. He now occupies the roles of fixed income strategist, economist and portfolio manager. He manages the Securities Portfolio Advisory Group, advisor marketing and distribution of financial planning and insurance.