Archive for April, 2012

CANADA STOCKS-TSX tumbles on weak global data

Posted in Beavers  by: admin
April 30th, 2012

* TSX down 55.79 pts, or 0.5 pct, at 12,181.96
    * Financial, material issues fall
    * Soft data revives global growth fears

    By Jon Cook
    TORONTO, April 30 (Reuters) - Toronto's resource-heavy main
stock index fell on Monday with material and financial issues
leading the way after weak economic data from North America and
Europe heightened fears about the pace of global growth.
    Eight of 10 main sectors in the index were lower.
Heavily-weighted materials and financials both dropped 0.8 as a
host of data painted a bleak picture about global growth
prospects.
    Data showed Spain, the euro zone's fourth largest economy,
slipped into recession in the first quarter as domestic demand
fell, adding to fears of a deepening euro-zone recession.

    Financial losses were led by top banks Toronto-Dominion Bank
, down 0.9 percent to C$82.21, and Royal Bank of Canada
, which sagged 0.9 percent to C$56.50.
    Top gold producers Barrick Gold, down 0.9 percent
to C$39.53, and Goldcorp Inc, which slid 1.7 percent to
C$37.73, also weighed as bullion prices paused after four
straight sessions of gains.
    Goldcorp's shares were further pressured after Canada's No.
2 gold miner said environmental permit approval for its El Morro
copper-gold project was suspended by the Supreme Court of Chile.

    "That all rolls into the weaker economic data that we've
been seeing," said Philip Petursson, part of the portfolio
advisory group at Manulife Asset Management.
    At 10:30 a.m., (1430 GMT), the Toronto Stock Exchange's
SP/TSX composite index was down 55.79 points, or 0.5
percent, at 12,181.96.
    Oil and gas producers fell as Brent crude prices slipped but
held above $119 per barrel. TransCanada Corp slid 0.6
percent to C$42.91, and Encana Corp shares fell more
than 2 percent to C$19.74.
    Weak North American data also hurt risk sentiment. A key
gauge of business activity in the U.S. Midwest slowed more than
expected in April, falling to its lowest since November 2009, a
report showed on Monday.
    "The Chicago PMI was down quite a bit, and that might be
spooking some people," said Petursson. "It's down from 62.2 to
56.2 so that's a big drop in a month. It means we're expanding
at a much slower pace."
    In Canada, data revealed the economy unexpectedly declined
0.2 percent in February from January, led by temporary closures
in mining and other goods-producing industries.

© Thomson Reuters 2012 All rights reserved

Article source: http://af.reuters.com/article/metalsNews/idAFL1E8FU67C20120430

Canada equities set for monthly fall

Posted in Beavers  by: admin
April 30th, 2012


By Myra P. Saefong, MarketWatch

SAN FRANCISCO (MarketWatch) — Canadian equities followed energy stocks modestly higher Monday, but the gains weren’t enough to make April a winning month following unexpected weak economic data.

The SP/TSX Composite Index


/quotes/zigman/20942 CA:$ISPTX
+0.45%



 closed at 12,292.69, up 54.94 points, or 0.5%, after earlier tapping a low of 12,156.76. In April, the benchmark index lost 0.8%.


Click to Play

Spain falls back into recession

Spain’s economy contracted for a the second consecutive quarter, personal spending rose 0.3% in March, and Microsoft has invested $300 million in Barnes Noble’s Nook unit. Paul Vigna has details on The News Hub.

The government reported the economy shrank in February by 0.2%. Economists had expected a month-on-month gain of around 0.1%.

“The unseasonably warm winter weather proved to be a net negative for Canada,” Paul Ashworth, chief North America economist at Capital Economics, wrote in a research note. “With households spending less to heat their homes, we would have expected to see an increase in spending on other goods and services.”

Decreases in mining and oil and gas extraction, manufacturing, utilities as well as forestry and logging outpaced advances in construction, Statistics Canada reported. Mining and oil and gas extraction fell 1.6% in February.

News of a slowdown in U.S. consumer spending in March, a 29-month low for Chicago PMI in April and a 0.3% fall in Spain’s first-quarter GDP also helped put a cap on any gains.
Read more on Spain’s GDP.

Prospects for a rate increase

Before the GDP data came out, the Bank of Canada had been “perceived as the leading candidate to be the first to raise rates” in the Group of Seven industrial economies, according to strategists at Brown Brothers Harriman.

However, now that first-quarter growth seems unlikely to hit the bank’s 2.5% target, “some of the fundamental justification for the recent market move to pull prospective rate hikes into July or even June feels overdone,” said David Tulk, chief Canada macro strategist at TD Securities.

“We expect that the next increase will occur in September of this year and we would need to see continued upside surprises in both the data and the international backdrop to warrant an earlier move,” he said in research note. “February GDP suggests we are not there yet.”

On April 17, the Bank of Canada kept its target for the overnight rate at 1%. Its monetary policy announcement is set for June 5.


/quotes/zigman/24977
TTMN
1,030.79,
-14.56,
-1.39%

In Toronto, the SP/TSX Capped Diversified Metals and Mining Index


/quotes/zigman/24977 XX:TTMN
-1.39%



, which fell 1.4%, and the SP/TSX Capped Gold Index


/quotes/zigman/23271 XX:TTGD
-0.28%



, which lost 0.3%, were among the bigger decliners in the subsectors.

Shares of Goldcorp Inc.


/quotes/zigman/22920 CA:G
-1.43%



 lost 1.4% after the company announced that the Supreme Court of Chile issued on Friday a decision suspending the approval of the environmental permit for the El Morro copper-gold project.

Other miners lost ground, with Lundin Mining Corp.


/quotes/zigman/31370 CA:LUN
-1.64%



 down 1.6%, Inmet Mining Corp.


/quotes/zigman/13509 CA:IMN
-1.20%



 falling 1.2% and Ivanhoe Mines Ltd.


/quotes/zigman/19098 CA:IVN
-3.03%



 shedding 3%.

The SP/TSX Capped Energy Index


/quotes/zigman/23267 XX:TTEN
+1.46%



 was the biggest gainer, tacking on 1.5% by the close, following recent strength in oil prices and a rally Monday for natural gas.
Read about Monday’s energy trading.

The SP/TSX Capped Information Technology Index


/quotes/zigman/23269 XX:TTTK
+0.90%



also advanced 0.9% as Research In Motion Ltd.


/quotes/zigman/18555 CA:RIM
+2.47%



 shares climbed 2.5%.

In currencies action, the U.S. dollar


/quotes/zigman/4867882/sampled USDCAD
+0.1411%



 bought 98.73 Canadian cents, up from 98.10 Canadian cents late Friday.

The GDP should be placed in the context of the “very strong March employment report, that has tended to detract from February data signals that are now two months old,” said Alan Ruskin, global head of G-10 foreign-exchange strategy at Deutsche Bank. “As such, follow-through selling of CAD is seen as likely to be limited.”

/quotes/zigman/20942




Add to portfolio

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Article source: http://www.marketwatch.com/story/canada-equities-fall-gdp-unexpectedly-declines-2012-04-30?link=MW_story_latest_news

Canada Enhances Business and Research Collaboration Opportunities With Brazil

Posted in Beavers  by: admin
April 30th, 2012

OTTAWA, ONTARIO–(Marketwire -04/30/12)-
The Honourable Gary Goodyear, Minister of State for Science and Technology, wrapped up an official visit to Brazil yesterday, where he was part of the official delegation of His Excellency the Right Honourable David Johnston, Governor General of Canada.

During his visit, the Minister of State delivered a keynote address to business leaders, academics and government officials at an innovation forum in Sao Paulo. In his remarks, he underscored the importance of supporting collaborative research as a means of promoting innovation and economic growth.

“Our respective governments share a common commitment to science and technology as a way of ensuring future prosperity,” said Minister of State Goodyear. “Collaboration between governments, academics and business people is vital to building innovative economies.” The Minister of State welcomed the many bilateral collaborative research partnership arrangements between Brazilian and Canadian universities and research funding organizations that were signed during the mission.

The Minister of State also delivered welcoming remarks at the University of Campinas, where His Excellency spoke to Canadian and Brazilian university officials about university researchers and the private sector collaborating to create innovative communities.

Brazil is an important partner for Canada because of its strong science base, potential for innovation-based growth, and technological similarities with Canadian industry and academia. In November 2008, Canada and Brazil signed a Framework Agreement for Cooperation on Science, Technology and Innovation, which was ratified in 2010. The agreement allows Canadian and Brazilian partners from industry, academia and government to collaborate on joint research and development projects as well as scientific conferences and workshops. The agreement also provides for the exchange and lending of equipment and materials and for student and researcher mobility. Since the agreement’s ratification, the bilateral relationship has taken on a new momentum.

For more information on Canada-Brazil relations, visit the website of the Embassy of Canada to Brazil (www.canadainternational.gc.ca/brazil-bresil/index.aspx?lang=engview=d).

For more information on the official visit to Brazil, visit the website of the Governor General of Canada (www.gg.ca/document.aspx?id=14502lan=eng#April23_Brasilia).

Michele-Jamali Paquette
Director of Communications
Office of the Honourable Gary Goodyear
Minister of State (Science and Technology)
613-947-2956
Media Relations
Industry Canada
613-943-2502

Article source: http://finance.yahoo.com/news/canada-enhances-business-research-collaboration-161200099.html

Canada Dollar Falls as Economy Decline Trims Rate View

Posted in Beavers  by: admin
April 30th, 2012

Canada’s dollar fell the most in
one month against its U.S. counterpart after the nation’s gross
domestic product unexpectedly shrank in February, weakening the
argument for higher borrowing costs.

The currency extended losses after a report showed the
economy was hurt by mining shutdowns and the first drop in
manufacturing in six months. The Canadian dollar advanced
against all of its major counterparts except the yen last week
on speculation the Bank of Canada will become the first among
Group of Seven peers to raise borrowing costs.

“The reaction is the right one, given how much we’d priced
in, in terms of rate hikes,” said Adam Cole, global head of
foreign-exchange strategy in London at Royal Bank of Canada’s
RBC Capital Markets unit, in a telephone interview. “Even after
the correction today, we’re probably still vulnerable to
downside data surprises.”

Canada’s currency, nicknamed the loonie, declined 0.8
percent to 98.83 cents per U.S. dollar at 12:34 p.m. in Toronto.
It fell as much as 0.9 percent, the most since March 20. It
touched 98 cents on April 27, the strongest since September. One
Canadian dollar buys $1.0119.

The loonie has appreciated 1.1 percent this month versus
the greenback in the fifth-best performance among its 16 most-
traded peers, trailing the yen and Singapore dollar. The
Canadian dollar is up 3.4 percent this year.

Rate Projections

The probability of higher borrowing costs by the central
bank’s September meeting fell to about 66 percent after the GDP
report, representing a 22 basis points of tightening, or less
than a full quarter-percentage point, according to Bloomberg
calculations based on overnight index swaps. Odds were 75
percent at the end of last week, with 27 basis points priced in.

Movements in the Canadian dollar will be driven mostly by
month-end rebalancing, as money managers buy and sell
international securities to remain within foreign-holding
limitations, according to Firas Askari at Bank of Montreal. (BMO)

“Month-end flows will dictate the course of the day,”
said Askari, head currency trader at the bank’s BMO Capital
until in Toronto, in an e-mail. “There are still many buyers of
U.S. dollars around 98 cents.”

Government bonds rose, pushing the benchmark two-year yield
down eight basis points to 1.34 percent, headed for the biggest
one-day drop since Dec. 1. The price of the 0.75 percent
securities due in May 2014 advanced 16 cents to C$98.84.

Economic Data

Economic output fell 0.2 percent to an annualized C$1.28
trillion ($1.30 trillion) after a January gain of 0.1 percent,
Statistics Canada said today in Ottawa. Economists surveyed by
Bloomberg News had forecast a 0.2 percent increase, according to
the median of 24 responses.

“The Canadian GDP figure was a little bit disappointing
and is weighing on the Canadian dollar,” said Nick Bennenbroek,
head of currency strategy at Wells Fargo Co. in New York.

The world’s 10th largest economy will be challenged by the
“persistent strength” of the Canadian dollar and slow growth
in the U.S. and Europe, central bank Governor Mark Carney said
in April 27 remarks in Ottawa. Carney is relying on consumption
and housing to contribute two-thirds of the country’s projected
2.4 percent economic growth this year.

The Canadian dollar rose 0.9 percent during the past three
months in the third-best performance among the 10 developed-
nation currencies tracked by Bloomberg Correlation-Weighted
Currency Indexes. The biggest gainer was the British pound, up
3.1 percent.

To contact the reporter on this story:
Chris Fournier in Halifax at
cfournier3@bloomberg.net

To contact the editor responsible for this story:
Dave Liedtka at
dliedtka@bloomberg.net

Please enable JavaScript to view the comments powered by Disqus.

Article source: http://www.bloomberg.com/news/2012-04-30/canada-dollar-falls-as-economy-decline-trims-rate-view.html

CANADA FX DEBT-C$ tugged lower by Canada GDP, Spain

Posted in Beavers  by: admin
April 30th, 2012

Mon Apr 30, 2012 1:40pm EDT

Article source: http://www.reuters.com/article/2012/04/30/markets-canada-dollar-bonds-idUSL1E8FU6EQ20120430

Parks Canada hit hard as Ottawa doles out nearly 4000 job notices

Posted in Beavers  by: admin
April 30th, 2012

Canadians will face shorter seasons at national parks and historic sites according to public service union leaders who say Parks Canada has been particularly hard hit by federal spending cuts.

Monday is proving to be another big day of staffing cuts as departments continue to roll out the details of how Ottawa will eliminate 19,200 positions in an effort to save $5.2-billion a year.

More related to this story


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Budget bill also tackles CSIS oversight, EI and environment

The Public Service Alliance of Canada (PSAC) – the largest union of federal public servants – told reporters that 3,872 of its members across 10 departments received notices Monday that they could lose their jobs.

Public servants who receive these “affected” notices won’t necessarily lose their jobs. However some departments did inform workers that they have been declared “surplus,” which means their jobs are definitely being eliminated. Surplus employees can still take advantage of various programs that could help them find another federal government job.

While the job numbers still leave many questions unanswered, the totals and their locations do give a sense of what programs and services are being cut.

-At Parks Canada, 1,689 PSAC members received affected notices and staff were told that 638 positions will be eliminated.

According to the union, the affected Parks Canada workers include scientists, engineers, technicians, mechanics, carpenters and program managers. Further, seasonal workers are being told their seasons and hours of work will be shortened.

Union leaders warn this will hurt small businesses who cater to tourists visiting national parks, sites and canal systems.

-At Human Resources and Skills Development Canada, 908 PSAC members received notices. The union says the cuts will affect several programs, including the aboriginal affairs directorate, the employment program for persons with disabilities, the workplace partnership directorate and the temporary foreign worker directorate within the skills and employment branch.

Union leaders said the cuts to workforce programs contradict the government’s recent claims that it is working to address Canada’s labour skills shortages.

-At Transport Canada, union leaders say airport and marine security will be sacrificed as 180 PSAC members received notices. An expected eight positions will be eliminated at marine security operations centres. The union said 11 air security inspectors received notices Monday whose work essentially involves “double checking” airport security.

-The department of Aboriginal Affairs and Northern Development sent notices to 490 PSAC members, but the union said little additional information was provided.

- At Statistics Canada, 273 PSAC members received notices

- At Library and Archives Canada, 235 PSAC members received notices and 105 positions are expected to be eliminated.

-At Correctional Services Canada, 17 inmate rights and redress workers received notices. John Edmunds, the Union of Solicitor General Employees, warned that prisons become more dangerous when prisoners do not feel their concerns are being heard.

Federal departments do not issue news releases after informing staff about cuts. As a result, the first details of spending cuts routinely emerge from public sector unions. Some departments have at times provided additional detail after unions have made this information public, while others have declined to provide this information.

Article source: http://www.theglobeandmail.com/news/politics/ottawa-notebook/parks-canada-hit-hard-as-ottawa-doles-out-nearly-4000-job-notices/article2418073/

Canada's trade and aid appear increasingly aligned

Posted in Beavers  by: admin
April 30th, 2012

TORONTO, Apr 27 (IPS) – Canada is ending bilateral aid programmes in eight countries and refocusing efforts in five others due to “high operating costs”, a move which the umbrella group representing Canadian international development organisations says is difficult to immediately measure but will affect some of the poorest countries in the world.

The Canadian International Development Agency (CIDA) will end bilateral programming where aid efforts are hindered by high operating expenditures: Nepal, Rwanda, Zambia, Zimbabwe, Malawi, Niger, Cambodia and China, Scott Cantin, the agency’s media relations and public affairs manager, told IPS in an e-mail.

The agency will also reduce and concentrate its bilateral programming in Mozambique, Bolivia, Ethiopia, Tanzania and Pakistan, Cantin wrote.

The changes are part of the federal government’s plans to curtail 319.2 million dollars from CIDA’s funding over the next few fiscal years. More details about how the 2012 budget is to be implemented will be released in the coming weeks.

Chantal Havard, the government relations and communications officer at the Canadian Council for International Cooperation (CCIC) in Ottawa, argued that it is “hard to assess” the direct impact of the cost-cutting exercise because the exact reductions in each country are still unclear. Yet, she added, significant staff cuts will undermine CIDA’s capacity to play a strong leadership role among other donor countries.

Moreover, many of the countries that have experienced a total funding loss or decrease – eight are located in Africa – “rank at the bottom” of the United Nations’ 2011 Human Development Index, Havard said.

“We’re turning our back on those who need Canadian assistance the most,” she said.

Peru, Colombia, Ukraine, Bangladesh and Vietnam, with which Canada has either ongoing trade agreements or is carrying out significant business activity, will see no change in their relationships with Ottawa, Havard said, pointing out that many are middle-income nations.

Although Canadian development NGOs are unaware of the exact criteria determining which countries merit slashed funding, “there’s definitely a tendency towards bringing together more and more of Canada’s trade interests and business interests with international development interests,” she said.

Overall, the Conservative government is not “ideologically” attracted to development assistance as a principle because of problems accounting for funding and showing results, said Dane Rowlands, a professor and the associate director of Carleton University’s Norman Paterson School of International Affairs in Ottawa.

Still, Canada’s development arm emphasised that it will continue to provide aid assistance to Benin and Afghanistan, and meet publicly stated commitments to Caribbean countries, despite previous media reports.

The agency will deliver “value for aid dollars” and respond to humanitarian crises in a “timely and meaningful manner”, CIDA’s Cantin said. The government will maintain sufficient funding to meet development objectives like improving the health of mothers and children through the Muskoka Initiative and curbing poverty through multilateral programmes, he added.

Over time, the countries that the Canadian government has targeted for funding reductions will not to a great degree notice Canada’s withdrawal, though this might depend somewhat on whether CIDA also slashes financing to these states via its “Partnership with Canadians” branch, said Rowlands.

The branch supports Canadian organisations improving the quality of life in poor, developing countries.

Smaller communities, however, will experience “noticeable effects” when specific projects are terminated, Rowlands said. A further danger is that Canada’s rationale for selecting these countries for cuts – high operating costs – may also influence a possible “piling-on effect” whereby donors prefer concentrating in a few countries with an easier operational environment, he noted.

As a result, some of the countries CIDA has earmarked for the “chopping block” may become “aid orphans that few donors want to deal with”, he added.

In this era of global austerity, Canada faces a low immediate risk to its international standing among established donors which also register below the 0.7 percent of GDP target for aid, Rowlands conceded, although “behind closed doors I suspect some disappointment will be expressed to Canada”.

Funding recipient states will view Canada’s slashed bilateral assistance as its further withdrawal from the development scene, but individual nations are unlikely to voice complaints due to fears of deeper cuts or a wish to “make it back on the list”, he told IPS.

Within the wider development and NGO community, Ottawa is vulnerable to a further decline in its “once reasonably positive” reputation in this regard, noted the academic, adding that Canada will be perceived as “quick to cut assistance when times are tough” and will probably continue to “drift down the donor ranks”.

Today, Canada holds the 10th spot of the OECD’s Development Assistance Committee ranking of donor nations, he said.

Yet, as the global economy slowly recovers and the government nears the next election, aid will probably increase, predicted Rowlands. By then, it will be harder to blame cost-cutting on economic weakness, he said.

And governments often turn their attention to foreign affairs as they grow “bored and frustrated with domestic issues” deeper into their terms.

*More from OneWorld

» Foreign Aid Guide

Article source: http://news.yahoo.com/canadas-trade-aid-appear-increasingly-aligned-083750476.html

C$ tugged lower by Canada GDP, Spain

Posted in Beavers  by: admin
April 30th, 2012

TORONTO (Reuters) – Canada’s dollar sagged against its U.S. counterpart and domestic bond yields retreated on Monday after Canadian GDP unexpectedly shrank in February and Spain stoked euro zone worries.

Canada’s gross domestic product contracted by 0.2 percent in February from January, data showed, surprising analysts who had expected a 0.2 percent increase.

The report disappointed markets and cooled talk that the Bank of Canada could start raising interest rates in the near future.

The Canadian currency also tracked a fall in global stock markets on data showing Spain slipped into recession and the U.S. economy appeared to be slowing.

“Blood and guts all over the street today,” said Steve Butler, managing director of foreign exchange trading at Scotiabank, of the move in the Canadian currency.

“I think the market was expecting maybe a little bit of a disappointment on the GDP and we got a lot of disappointment in the GDP number,” he said.

He added he was a little surprised about the market’s strong reaction, but said month end flows could be exaggerating the move.

At around 12:55 a.m. (1655 GMT), the Canadian dollar was at C$0.9879 versus the U.S. dollar, or $1.0122, down from Friday’s finish at C$0.9810 versus the U.S. dollar, or $1.0194, following the Canadian dollar’s advanced to a seven-month high.

Canada’s currency has been supported in the last couple weeks by ramped-up expectations of interest rate hikes by the Bank of Canada. It surprised investors with a more positive domestic economic outlook and an explicit warning that it may have to start raising rates again.

The more-hawkish-than-expected central bank had promoted a significant widening in two-year bond spreads between Canada and the United States.

Following the data on Monday however, bond prices jumped and yields dropped, while the pricing of overnight index swaps also showed traders had cut back prospects of rate increases for the remainder of the year.

“The market, in my mind, got carried away from comments by (Bank of Canada Governor) Carney,” said Butler, “all of a sudden pricing in rate cuts this year, more than one potentially, was much, much too aggressive. I think the market is feeling a little bit of that today.”

Jeremy Stretch, head of foreign exchange strategy at CIBC World Markets in London, said the Canadian dollar could soften further to around C$0.9870-80 in the short term, noting weakness against the euro as well, though risk factors in the euro zone would far outweigh any concerns about a monthly GDP number in Canada.

Canadian government bonds outperformed their U.S. counterparts across the curve following the negative surprise in Canada’s February GDP.

The rate-sensitive two-year bond rose 16 Canadian cents to yield 1.348 percent, while the benchmark 10-year bond added 26 Canadian cents to yield 2.057 percent.

(Additional reporting by Jennifer Kwan)

Article source: http://news.yahoo.com/c-tugged-lower-canada-gdp-spain-175528000--finance.html

Canada GDP drop cools talk of rate hikes

Posted in Beavers  by: admin
April 30th, 2012

OTTAWA (Reuters) – Canada’s economy unexpectedly shrank in February, disappointing markets and cooling talk that the Bank of Canada could start raising interest rates in the near future.

Statistics Canada said gross domestic product dropped by 0.2 percent in February from January, surprising analysts who had expected a 0.2 percent increase.

Statscan cited factors such as temporary closures in the mining and other goods-producing industries. Year-on-year growth was an uninspiring 1.6 percent, the weakest since the 1.2 percent recorded in January 2010.

Analysts said the data would provide food for thought at the Bank of Canada, which has warned recently that higher interest rates may be necessary to deal with a recovering economy and higher inflationary pressures.

“The Canadian economy disappointed in a big way in February … While much of the weakness looks temporary, it drives home the point that the underlying growth rate is sluggish at best,” said Douglas Porter, deputy chief economist at BMO Capital markets.

“The pullback in output will dampen some of the most hawkish views on the Bank of Canada and take some steam out of the Canadian dollar.”

Porter said first-quarter growth now would be lucky to hit 2 percent, let alone the 2.5 percent that the Bank of Canada is projecting.

Statscan said potash mining fell by 19 percent after weak world demand prompted the closure of mines in Saskatchewan. Copper, nickel, lead and zinc mining fell by 9.9 percent as several nickel mines in Ontario were shut for safety reasons.

Oil and gas extraction dropped by 0.9 percent, in part due to unplanned maintenance at crude petroleum facilities in the oil-rich province of Alberta.

While analysts had expected some temporary factors to bite, they were surprised by a 1.2 percent drop in manufacturing after five consecutive increases. Utilities fell by 1.9 percent, pulled down partly by unseasonably warm weather that cut demand for electricity and natural gas.

Overnight index swaps, which trade based on forecasts for the central bank’s key policy rate, showed that traders have lowered their bets on monetary policy tightening later this year.

Expectations had jumped earlier this month after the central bank used more hawkish language in its rate announcement and monetary policy report.

“There go market bets that the Bank of Canada would shift to summertime rate hikes as fed by global hot money bets, and this report is more in keeping with our view that the (bank) would not be shifting toward rate hikes this year,” said Scotia Capital economists Derek Holt and Dov Zigler in a research note.

The figures knocked Canada’s dollar as low as C$0.9895 versus the greenback, or $1.0106, down from the seven-month high of C$0.98, or C$1.0204, it reached on Friday.

Still, the Bank of Canada warned again on Monday it may have to pull back on policies designed to stimulate the economy, with Deputy Governor Timothy Lane reiterating the more hawkish language the BOC introduced this month and pointing to the need to keep inflation in check.

A Reuters survey of primary dealers on April 17 showed the median forecast for the timing of the next rate increase had moved to the first quarter of 2013 from the third quarter.

The central bank has kept rates at a near-record low of 1 percent since September 2010.

Avery Shenfeld of CIBC World Markets Economics said first quarter growth was likely to be no better than 2 percent, “implying that the output gap was not narrowing in the quarter as a whole, and taking us one step back from the precipice of renewed interest rate hikes”.

In a separate report, Canadian producer prices rose by 0.2 percent in March from February, pushed up by higher prices for petroleum and coal products, Statistics Canada said.

The increase was less than the 0.3 percent advance forecast by market operators. Raw material prices plunged by 1.6 percent on weaker mineral fuels, a far cry from the 0.3 percent growth expected by analysts.

(Additional reporting by Louise Egan; Editing by Peter Galloway)

Article source: http://news.yahoo.com/canada-gdp-drops-feb-temporary-factors-cited-123747322--business.html

Canada producer prices edge up on petroleum, coal

Posted in Beavers  by: admin
April 30th, 2012

One of Australia’s richest men, Clive Palmer, on Monday unveiled plans to build a 21st century version of the doomed Titanic in China, with its first voyage from England to New York set for 2016.

Article source: http://news.yahoo.com/canada-producer-prices-edge-petroleum-coal-123958776--business.html