First Look With Surveillance: ECB Debate, Pound Siege
The market pendulum has swung, and that’s immediately evident looking at global currency rates, as the U.S. dollar is pulling back (at least as of 5:50 a.m. EDT) against every major counterpart, while the British pound is in rally mode, climbing as much as one-and-a-half cents against the U.S. dollar. With the greenback’s decline this morning, most commodity prices are rising and U.S. futures are suggesting there will be gains at the start of trading after five straight days of losses in New York and for the S&P/TSX Composite Index. There’s no single obvious catalyst here; so we’ll turn to market professionals to help explain today’s market dynamics.
FEDS SHOULD HEED 'WARNING SHOT' FROM U.K. TURMOIL: BMO
Robert Kavcic at BMO Economics is encouraging fiscal policymakers in Ottawa to take a lesson from the market's response (yesterday) to the U.K.'s tax cuts. "The unfolding troubles in the U.K. are a stark reminder that fiscal policy is not free to do whatever it wants, whenever it wants," he said in a blast to clients. His message to the government: it would be a "very wise move" to stay out of the way of Canada's improving fiscal outlook. We’re hoping to speak with him.
TRACKING STORM IMPACT
If you missed it, check out Jacqueline’s conversation with Insurance Bureau of Canada Vice-President Amanda Dean, who explained why it’s been “nearly impossible” for the insurance industry to do risk modelling that’s necessary to offer coverage for storm surge devastation like what we’re witnessing in Atlantic Canada. Which begs the question of what kind of resources are necessary to provide that coverage. We’ll keep exploring that, and also look to Florida where companies including Emera (through Tampa Electric) and Mosaic are preparing for Hurricane Ian.
'UNPRECEDENTED' NORD STREAM DAMAGE
That’s how the pipeline operator at the centre of Europe’s energy crisis described three gas leaks that have cast more doubt on the outlook for supply heading into the winter. And now Bloomberg News is reporting that Germany is gathering evidence that points to the disruption being caused by sabotage.
OTHER NOTABLE STORIES
- Sam Bankman-Fried’s FTX is poised to acquire the assets of Voyager Digital; that’s the crypto platform that filed for Chapter 11 bankruptcy protection in the U.S. after getting burned on its exposure to crypto hedge fund Three Arrows Capital. FTX was deemed the successful bidder with an offer pegged at US$1.42 billion, based on the fair market value of Voyager’s crypto holdings.
- Ahead of an investor presentation this morning, Cargojet released long-term financial targets, including a goal of nearly doubling its annual revenue to as much as $1.4 billion in 2026.
- Full credit to Paige for pointing out that analysts pressed Dye & Durham executives on a conference call late yesterday about the size of M&A that’s being considered after the Link takeover fell through. CEO Matthew Proud said there’s room to borrow if debt is needed to supplement the $500 million in liquidity that’s at the company’s disposal for deals. And shortly before markets opened this morning, Dye & Durham announced it may repurchase up to five per cent of its common shares.
- Notable data: U.S. durable goods orders, new home sales, and Conference Board consumer confidence index
- Notable earnings: BlackBerry
- 900: Bank of England Chief Economist Huw Pill addresses Barclays-CEPR International Monetary Policy Forum
- 1000: Cargojet hosts investor day
- 1900: Parliamentary Budget Officer Yves Giroux addresses Senate Banking, Commerce and the Economy Committee hearing on state of the Canadian economy and inflation