Daily Pulse


Share of SNC-Lavalin Group Inc. surged after settling a fraud charge related to bribes it paid in Libya a decade ago, lifting a legal cloud that had engulfed Canada’s largest engineering and construction company. SNC-Lavalin Construction, a unit of the Montreal-based firm, pleaded guilty to fraud and agreed to pay a C$280 million ($213 million) fine over five years, while accepting a three-year probation order. Charges against the parent SNC and its international marketing arm were dropped. The settlement and related fines were much less severe than many analysts expected, bringing an end to a legal saga that’s been hanging over the company for years and even touched the government of Prime Minister Justin Trudeau. The legal troubles added to three profit warnings, a writedown on its Middle East energy business and the loss of a contract in Chile, pushing the stock down by almost half this year before the surge Wednesday.


The U.S. House of Representatives impeached President Donald Trump on charges of abuse of power and obstructing Congress, the culmination of an effort by Democrats that further inflamed partisan tensions in Washington and deepened the nation’s ideological divide. The historic votes on Wednesday evening, which won the support of almost all Democrats in the House but not a single Republican, make Trump only the third president in U.S. history to be impeached -- and likely the only impeached president to win his party’s nomination for re-election. The Senate will hold a trial early next year to decide whether the president should be convicted on the charges and removed from office, though the Republicans who have the majority in that chamber will almost certainly acquit him.


The Bank of England signaled it will focus on the next phase of Brexit negotiations as two policy makers continued to push for an immediate interest-rate cut. Officials said it was too early to tell whether the clearer path for the U.K.’s departure from European Union on the back of Boris Johnson’s election win will improve sentiment. They repeated that monetary policy may need to add stimulus if Brexit uncertainty remains entrenched or global growth failed to stabilize. The bank’s Monetary Policy Committee, led by Governor Mark Carney, voted 7-2 to hold rates at 0.75%. Michael Saunders and Jonathan Haskel maintained their push for an immediate cut, saying that with little room for looser policy, “risk management considerations favored a prompt response to downside risks.”

Germany will join European peers like France and Poland next year in selling green bonds, tapping rising demand and favorable issuance costs for such debt as it boosts investments to cut carbon pollution. Europe’s benchmark issuer will sell about 10 billion euros of the bonds from mid-year via auctions, “twinning” emissions with regular bonds of the same maturity and coupon, the Federal Finance Agency said on Thursday as part of its overall issuance calendar for 2020. The bonds will be fully convertible with their sister bonds ahead of maturity.


Bank of Japan chief Haruhiko Kuroda added his voice to the guarded optimism among major central bankers over the trajectory of global growth. Progress in U.S.-China trade talks, a stronger U.K. mandate for Brexit and an apparent bottoming of the manufacturing slump are easing concerns over a global slowdown that had triggered a wave of interest rate cuts across the world earlier in the year. Heading into 2020, extra easing hasn’t been entirely taken off the table for global central bankers including Kuroda, but the possibility of a long holding pattern followed by a firming of policy is now looking a lot more likely than it did at the end of the summer.

China’s central bank injected the most liquidity via open-market operations since January, in a push to ensure ample cash supply ahead of seasonal tightness at year-end. The People’s Bank of China added 280 billion yuan ($40 billion) into the financial system with 7 and 14-day reverse repurchase agreements Thursday, while keeping the interest rates unchanged. That came after the authorities restarted such operations after a 20-day hiatus on Wednesday. The overnight repo rate -- an indicator of interbank liquidity -- plunged the most in a month, while the benchmark seven-day tenor saw its biggest decline since July.

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.