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Daily Pulse

Canada

An influx of immigrants and non-permanent residents boosted Canada's population by 0.6% in the third quarter, the biggest increase in records dating back almost five decades. The country's population grew by 208,234 in the July to September period, with some 83% of that increase due to international migration, according to estimates from Statistics Canada released Thursday in Ottawa. Growth of this magnitude from international migration “had never been seen before in a single quarter,” the agency said.

Justin Trudeau’s deficits could grow even larger, according to Canada’s budget watchdog, who said the government may have to abandon a key fiscal anchor in the event of an economic downturn. The federal government’s shortfalls will be C$2.6 billion ($2 billion) higher on average per year than what Trudeau’s finance minister laid out in his recent economic update, the Parliamentary Budget Office said in a report.

United-States

Junk debt investors, cautious for most of this year, are starting to get exuberant again. The riskiest high-yield bonds have been on a tear this month, gaining 4.4% through Thursday, or more than double the returns for the broader speculative- grade market. In the credit derivatives market, insuring junk bonds against default hasn’t been this cheap since before the financial crisis. Amid the strong demand, banks have been able to offload some of the loans they struggled to sell earlier this year.

Shares of Nike traded lower on Friday after the global shoe and athletic gear powerhouse reported earnings and sales that beat analysts' forecasts but didn't quite make the three-pointer on the gross-margin front thanks in part to U.S. President Donald Trump's recent trade spat with China and related tariffs. For its fiscal second quarter, Nike posted earnings of 70 cents a share vs. 52 cents in the year-ago quarter and well above analysts' forecasts of 58 cents a share. Sales rose 10% to $10.32 billion against analysts' estimates of $10.09 billion.

It may be a busy U.S. session in markets later today when options and futures on stocks and indexes all expire at the same time, an event that usually drives trading volumes higher. Speaking of market mechanics, there was some relief for the repo market yesterday when the New York Federal Reserve’s $35 billion two-week liquidity operation covering the year-end period was undersubscribed. While there remains a premium for Dec 31. funding in markets, the Fed will run more operations ahead of the new year to meet needs.

Europe

Andrew Bailey will be the next head of the Bank of England after the government chose to replace Mark Carney with the U.K.’s top financial regulator, just as Britain faces the next phase of Brexit. He’ll start on March 16, with Carney, who was scheduled to leave at the end of January, extending his term until then to allow for a smoother handover. The U.K. is set to leave the European Union on Jan. 31, a deadline that is virtually guaranteed after Prime Minister Boris Johnson was returned to power this month.

Asia

Chinese President Xi Jinping isn’t planning to attend the World Economic Forum in January, according to people familiar with the matter, taking one option for a face-to-face meeting with his U.S. counterpart Donald Trump off the table. Beijing still plans to send its top trade negotiator Vice Premier Liu He to Washington to sign the phase-one deal in early January.

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.