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Daily Pulse


Inflation in Canada decelerated in August after consumers paid less for gasoline and vegetable prices dropped. Annual consumer price inflation slowed to 1.9% last month from 2% in July, Statistics Canada said Wednesday in Ottawa. The number matched analyst expectations. Canada’s CPI has grown at 1.9% or more on an annual basis for six consecutive months. The gains have coincided with robust labor market conditions.

Oil rose amid doubts about the speed of Saudi Arabia’s recovery from the weekend’s attack on its facilities that knocked out a large chunk of its production.


Intensifying trade conflicts have sent global growth momentum tumbling toward lows last seen during the financial crisis, and governments are not doing enough to prevent long-term damage, the OECD said in its latest outlook. The Paris-based organization cut almost all economic forecasts it made just four months ago, as protectionist policies take an increasing toll on confidence and investment, and risks continue to mount on financial markets. It sees world growth at a mere 2.9% this year.

The government is looking at selling 50–year bonds next year for the first time as it seeks new ways to finance a deficit that’s grown to around $1 trillion a year. If the sale is successful, it might sell 100 year bonds, too. Those bonds could demonstrate to companies that a group of investors are interested in longer-term debt. The U.S. bonds might also provide a more direct basis for pricing ultra-long-term corporate debt, giving companies more assurance that they’re getting reasonable pricing. Right now corporate obligations maturing in more than 30 years are still priced based on 30–year Treasuries

The Federal Reserve’s 25 basis-point interest rate cut yesterday was accompanied by forecasts that showed officials were split over the need for further easing. In the post-decision press conference, Chairman Jerome Powell refused to be drawn on where he thinks rates should go for the rest of 2019, with markets pricing in about a 65% chance of another move lower by the end of the year. The differing opinions among FOMC members helped drive the spread between two- and 10–year Treasury yields close to inversion, with shorter-term yields rising as the long end slipped.


Boris Johnson is not ruling out a further suspension of Parliament if the Supreme Court doesn’t prohibit it, according to his government’s filing in the landmark case. But it also said it would comply with what the judges decide, potentially restricting the prime minister’s options as he prepares for another showdown with Parliament over Brexit.

The European Central Bank gave the region’s lenders 3.4 billion euros ($3.8 billion) in free long-term loans as it revived a policy intended to boost economic growth and inflation. The three–year loans – at a rate that starts at zero and could fall as low as the deposit rate, currently minus 0.5% – are part of a package of stimulus measures that includes taking negative interest rates further below zero and restarting bond purchases. The take-up by the 28 banks that took part was far lower than expected. Predictions ranged from 20–100 billion euros.


The Bank of Japan reluctantly tiptoed closer toward ramping up its stimulus Thursday, setting up a Halloween policy meeting as a possible moment for action, while stopping short of guaranteeing it would pull the trigger. Following rate cuts by the Federal Reserve and the European Central Bank to prop up growth amid a global slowdown, the BOJ once again stood pat on policy on Thursday, taking advantage of a favorable upturn in markets to put off further measures to support Japan’s economy and prices.

Leading indicators of China’s trade performance are pointing to a bad situation becoming worse, adding pressure on negotiators meeting with U.S. counterparts this week to inch toward a deal that would stave off the arrival of yet more tariffs. China’s exports contracted last month and shipments to the U.S. plunged. The tariffs President Donald Trump added this month are set to bite and his administration is preparing to pile on yet more duties in October, and more again in December if there is no breakthrough in the negotiations.

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.