Daily Pulse


Canada’s biggest banks are signaling that financial issues from the Covid-19 crisis are largely in the rear-view mirror in North America – and earlier than analysts had expected. After a year of stockpiling record amounts of capital to protect against a wave of loan defaults, Royal Bank of Canada and Toronto-Dominion Bank – the country’s two largest banks — reversed course last quarter. Toronto-Dominion on Thursday reported a surprise C$377 million ($312 million) release of provisions for credit losses for its fiscal second quarter, while Royal Bank released C$96 million. Analysts had projected both lenders would continue setting aside capital to absorb potentially soured loans. With vaccination campaigns putting economic reopenings in reach in Canada and the U.S., strong housing markets fueling mortgage lending, and surging equity supporting capital-markets and wealth-management businesses, Toronto-Dominion and Royal Bank are asserting they have more than enough capital to handle any bumps along the road to recovery.


Data from the US Transportation Security Administration (TSA) suggests that US economic activity is normalizing rapidly. The number of travelers screened at TSA checkpoints in US airports continues to make fresh pandemic highs. Over the past week, that number was only 28% lower than the same week in 2019. This is a far cry from the same period last year during which traveler throughput was nearly 90% lower than the pre-pandemic level. The sharp acceleration in travel coincides with the ramp up in the US vaccination campaign. Half of Americans have already received at least one dose of the vaccine and more than a third are fully inoculated. This progress allows authorities to ease restrictions, and households to enjoy previously banned activities. Continued progress towards economic re-opening is critical for the labor market recovery. Private service providers accounted for about 75% of the jobs lost over the last 14 months. In particular, employment in the Leisure & Hospitality industry is still down 16.8% relative to the February 2020 level.


The European Union would benefit from common debt issuance to protect from asymmetric shocks and complement monetary policy, said European Central Bank Governing Council member Ignazio Visco.

Central banks can better control inflation expectations if they use a range for price growth rather than a precise goal, according to a European Central Bank study that could have implications for the institution’s strategic review. The working paper by Michael Ehrmann, head of the monetary policy research division and a former Bank of Canada official, looked at inflation-targeting strategies in 20 advanced and emerging-market economies. It found that defining a band within which consumer-price growth is considered acceptable bolsters the central bank’s credibility because it is less likely to miss the goal.


China will allow all couples to have a third child, a surprise move aimed at slowing the nation’s declining birthrate as risks to the economy’s long-term prospects mount because of a rapidly aging population.

A strengthening world recovery from the Covid-19 pandemic risks leaving behind many regions, fueling inequalities across and within borders, the Organization for Economic Cooperation and Development said Monday. As the Paris-based group revised up its 2021 global growth forecast to 5.8% from 5.6%, it warned of gaping differences that mean living standards for some people won’t return to pre-crisis levels for an extended period.

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.