Daily Pulse

Canada

A Canadian advisory body said Justin Trudeau’s government should relax its stringent border rules for vaccinated travelers and drop a requirement that international air passengers quarantine in a hotel when they arrive. In a report released Thursday, the Covid-19 Testing and Screening Expert Advisory Panel said it’s time for Canada to adopt different entry rules for travelers who’ve been vaccinated. People who have received two shots should be exempt from quarantine and pre-departure virus tests, said the panel, which was created in November by the government.

Canadian regulators handed a major victory to BCE Inc., Rogers Communications Inc. and other large telecommunications firms by reversing a decision that would have slashed the prices they can charge internet resellers. The big carriers will be able to charge rates similar to the prices originally set in 2016 for wholesale access to their broadband networks, the Canadian Radio-television and Telecommunications Commission said Thursday. The decision overturns a controversial 2019 ruling that would have forced large telecom companies to cut their wholesale ates sharply and make retroactive payments to small companies that lease space on their networks.

United-States

On the surface, the April US Durable Goods Report is a disappointment. The headline number declined by 1.3% m/m following a revised 1.3% m/m rise in durable goods orders in March, missing expectations of 0.8% m/m rise. April’s decline is the first monthly decrease in a year. However, the details of the report were much more upbeat. Specifically, a 6.7% plunge in transportation equipment accounted for the weak print. Excluding transportation, durable goods orders increased 1.0% m/m, beating consensus expectations. Moreover, core capital goods accelerated to a 2.3% m/m gain from an upwardly revised 1.6% m/m – significantly above the anticipated 1.0% m/m increase. Meanwhile, shipments of core capital goods, which will be used as an input in the Q2 GDP release, rose 0.9% m/m, slightly above consensus expectations of 0.8% m/m. Robust durable goods suggest that the US manufacturing upswing is intact. This is corroborated by regional Fed surveys which show that businesses’ capex intentions continue to rebound. The upbeat message is also confirmed by Thursday’s second estimate for Q1 GDP which included an upward revision to nonresidential fixed investment and showed that fixed investment in equipment increased by 13.4% on an annualized basis in Q1. The bottom line is that US cyclical spending should continue to provide a tailwind to US growth.

Europe

Germany selected more than 60 proposals from companies including ArcelorMitta and Thyssenkrupp for a new cross-border hydrogen project in the European Union to help promote the nascent technology. Europe is pinning its green hopes on hydrogen in an unprecedented economic overhaul that aims for the region to reach climate neutrality by 2050. The goal is to increase sixfold the capacity to produce renewable hydrogen by 2024, driving down the costs of the fuel.

The European Central Bank is increasingly expected by economists and investors to extend the elevated pace of its emergency bond-buying at its next meeting, despite a likely economic rebound.

Asia

Bitcoin slumped to wipe out most of this week’s advance as Bank of Japan Governor Haruhiko Kuroda warned about token’s volatility and speculative trading. The digital currency lost 7% to trade around $35,700, recalling levels seen in last week’s crypto meltdown. Bitcoin is now flat for the week after a run that’s seen prices swing between $33,000 and $39,000.

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.