Canadian dollar slips for third day ahead of BoC rate decision - The Globe and Mail

The Canadian dollar weakened against its U.S. counterpart on Tuesday as the greenback broadly climbed and as investors, who have recently turned bullish on the loonie, awaited an interest rate decision on Wednesday by the Bank of Canada.

The Bank of Canada is widely expected to leave its benchmark interest rate on hold at 1.75 per cent, despite expected policy-easing as soon as this month by the U.S. Federal Reserve. The central bank has said that there was evidence that a slowdown in the domestic economy was temporary.

The U.S. dollar gained against a basket of major currencies as investors reassessed their expectations of how much the Fed may cut interest rates this month. Fed Chief Jerome Powell is due to testify before Congress on Wednesday.

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The price of oil, one of Canada’s major exports, was pressured by worries about the U.S.-China trade dispute that has been dragging down the global economy and oil demand. U.S. crude oil futures fell 0.3 per cent to $57.5 a barrel.

At 9:42 a.m., the Canadian dollar was trading 0.2 per cent lower at 1.3127 to the greenback, or 76.18 U.S. cents. It was the third straight session that the currency has declined, after it notched last Thursday an eight-month high at 1.3038.

The loonie traded on Tuesday in a range of 1.3093 to 1.3135.

Speculators have turned bullish on the Canadian dollar for the first time since March 2018, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Monday. As of July 2, there were 6,293 contracts net long the loonie, which is a swing from 14,790 contracts net short the currency in the prior week.

Canadian housing starts rose much more than expected in June, to a seasonally adjusted annualized rate of 245,657 units, the Canadian Mortgage and Housing Corporation (CMHC) said.

Separate data from Statistics Canada showed that the value of building permits fell by 13 per cent in May from April, largely due to the value of permits in British Columbia returning to recent levels following a surge in April.

Canadian government bond prices were higher across the yield curve, with the two-year up 2 cents to yield 1.662 per cent and the 10-year rising 2 cents to yield 1.578 per cent.

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The 10-year yield touched its highest intraday since May 30 at 1.594 per cent.

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July 09, 2019 at 09:02PM

'It's not working too good' — inside Alberta's crude-by-rail dilemma - CBC News

Is Rally Over In Gold? - Kitco News

Everyone wants to know if the rally over in gold and what to expect next. Although nothing is ever 100% when it comes to trading and investing, based on the footprints being left in gold, the answer is no. In fact, the recent action in gold has been expected and should lead to the next leg of the rally.

Although gold has had a rough couple of days, it has managed to hold the $1,380 support level. As we have written the past few days, gold is in consolidation and as long as support holds, there is no reason to believe that the next leg won’t be higher. Consolidation is the toughest pattern for traders to deal with because it is the greatest time of uncertainty.

There could be some big movement over the next couple of days with Federal Reserve Chair Jerome Powell on the hill giving his two-day testimony on the state of the banking system. His testimony will be published before he starts, but the Street will be listening to the questioning. The interpretation of his words can create some big movement in markets, including gold.

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July 09, 2019 at 07:37PM

Canadian housing starts surge 25% on coast-to-coast increase - BNNBloomberg.ca

Canadian housing starts surged to the highest level in more than a year in June, led by construction of multiple-family dwellings such as condos and row houses.

In another sign of recovery for the nation’s real estate market, builders started work on an annualized 245,657 units last month, a jump of 25 per cent from May, Canada Mortgage and Housing Corp. said Tuesday -- easily topping the median forecast of 208,600 units in a Bloomberg survey. Multiple unit starts rose 31 per cent on the month to 189,200, CMHC said.

Gains were “evenly spread out across the country,” Jocelyn Paquet, an economist at National Bank Financial in Montreal, wrote in a note to clients, adding all 10 provinces registered increases, something that hasn’t happened since 1996.

The report is in line with other recent data that suggests the nation’s housing sector is stabilizing from a recent slump, easing concern that more expensive markets like Toronto and Vancouver were poised for a major correction. On a quarterly basis, starts rose 20 per cent in the April to June period, rebounding from a 14 per cent decline in the first three months of 2019, meaning residential construction should provide a positive contribution to second-quarter growth, Paquet said.

The increase in national housing starts was “primarily due to higher trending row and apartment starts in urban areas,“ Bob Dugan, CMHC’s chief economist, said in a statement. Home building was 36 per cent higher in Ontario, and up 12 per cent each in British Columbia and Quebec, the agency reported. It surged 43 per cent in Alberta.

“Robust population growth, strong labour markets, and past gains in pre-construction sales” are supporting starts, according to Rishi Sondhi, an economist at Toronto-Dominion Bank. He said, however, that starts are moving gradually lower on a “trend basis,” with the 6-month average well down from its late 2017 peak.

“We anticipate some further moderation, as starts move closer to a more fundamentally supported level of around 200k,” Sondhi said in a note.

In a separate release Tuesday, Statistics Canada reported residential building permits fell 17 per cent in May. More housing data is in the offing, with Statistics Canada’s New Housing Price Index for May out Thursday and Canadian Real Estate Association data on existing home sales due Monday.

--With assistance from Chris Middleton.

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July 09, 2019 at 10:24PM

Burger King is now selling $1 tacos nationwide. Here's why - CNN

The burger chain started selling crunchy tacos on Tuesday. They cost $1 in most places, but are more expensive in Alaska and Hawaii, and will only be available for a limited time.

Burger King first tested out tacos in western states. "We've seen success with tacos in those restaurants and knew it was time to bring this west coast favorite nationwide," Chris Finazzo, president of North America for Burger King, said in a statement. The new item adds "variety" to Burger King's snack offerings, he added.

Fast food chains use limited-time offerings to build hype and keep their brands top of mind with consumers. And tacos in particular are a good way to attract customers, said Neil Saunders, managing director of GlobalData Retail, a research and consulting firm.

"Tacos remain very popular with consumers," Saunders said, adding that fast food companies that wouldn't traditionally sell tacos may be "keen to get a slice of that action."

Jack in the Box in particular has had great success with its taco. The item has been "a #1 seller and a fan favorite for years," Jen Kennedy, VP of product marketing at Jack in the Box, told CNN Business in a recent interview. She said the taco has been a "stand out distinction for us." Jack in the Box also just started selling tiny, bite-sized tacos, but it's too early to say how they're doing.

Consumers are also flocking to Mexican chains for tacos. Taco Bell's parent company, Yum! Brands (YUM), reported that in the first quarter, sales at US Taco Bell restaurants open at least a year grew 5%. And sales at Chipotle (CMG) stores open at least a year grew 9.9% in the first quarter.

With its taco promotion, Burger King is likely trying to do more than just cash in on a specific, popular menu item, Saunders noted. It's also trying to create buzz for the brand with something unexpected.

"Some of it is marketing," Saunders said, adding that Burger King is adept at getting attention with creative menu innovations. For Halloween, the chain served a burger it claimed helped induce nightmares. More recently, to celebrate the third season of Netflix's "Stranger Things," it sold upside-down Whoppers in 1980s-era packaging.

There is a possible downside to attention-grabbing stunts, even successful ones. They could distract Burger King from focusing on creating growth within its main menu, Saunders said.

"They have to be careful with some of these promotions," he warned. "Burger King can be very haphazard with the menu." That can be a good thing because consumers like to try new things. But "sometimes you get the impression that Burger King chases after the shiny objects rather than focusing on the core business."

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2019-07-09 15:27:00Z
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Do we trust Burger King to make an adequate $1 taco? - The Takeout

Graphic: Burger King

In the realm of fast-food dollar tacos, Jack in the Box has long held the throne. But a new challenger has emerged to test its grip on power, and it’s a perhaps unlikely rival: Burger King. The chain announced it will debut $1 crispy tacos nationwide for a limited time starting today; they’re available as an add-on to orders or as a stand-alone item. (Sorry Alaska and Hawaii, your prices will be higher.) If the idea of a Burger King taco sounds familiar, the chain did serve tacos for a limited time about a decade ago.

For a dollar, you can’t expect a Doritos shell or strips of carne asada. Instead, you’ll get what sounds like a pretty standard American taco: a crunchy tortilla filled with seasoned ground beef, shredded cheddar cheese, and lettuce, topped with BK’s “savory taco sauce.”

Given the low price tag, sure, we’d probably give this a shot on our next swing through the drive-thru. And really, BK isn’t shooting for the moon with this new offering; as an add-on item, you just have to like the taco enough. It’s probably going to become the dollar item that you shove immediately into your face as you’re leaving the drive-thru, a sort of prelude to the Whopper main course, an amuse bouche of sorts.

Like opening bands and movie previews, it’s not what you came for, it’s just a little warm-up, a tide-over until the show gets started. It sets the stage and momentarily sates your rumbling stomach until you’re settled enough to unwrap your full meal. And for just a buck, that’s probably all it needs to do to succeed.

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2019-07-09 14:59:00Z
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Stocks slide as investors await more clarity on Fed rate-cut plans - MarketWatch

U.S. stocks fell at the start of trade Tuesday, putting them on pace for a third-straight losing session for Wall Street on Tuesday, as investors grew wary of equities ahead of key testimony from Federal Reserve Chairman starting Wednesday.

What are major indexes doing?

The Dow Jones Industrial Average DJIA, -0.33%  fell 117 points, or 0.4%, to 26,687, while S&P 500 futures SPX, -0.17% dropped 9 points, or 0.3%, to 2,968. The Nasdaq Composite COMP, +0.04%  dropped 12 points, or 0.2%, to 8,085.

On Tuesday, the Dow Jones Industrial Average fell 115.98 points, or 0.4%, to close at 26,806.14, while the S&P 500 index  declined 0.5% to finish at 2,975.95. The Nasdaq Composite Index declined 0.8% to end at 8,098.38.

Need to Know: Weaker growth will offset a Fed rate cut — so sell stocks, warns Morgan Stanley

What’s driving the market?

Investors appear less willing to hold stocks and other perceived riskier assets as they wait for two-day testimony before Congress by Fed Chairman Jerome Powell due to start Wednesday. Markets are hoping the central bank’s chief will shed some light on a meeting of the central bank’s interest-rate setting committee, slated for July 30-31, with investors clinging to hopes for a rate cut.

Expectations for interest-rate reductions have been scaled back since last week’s strong June jobs report, though a quarter-point reduction at the Fed’s meeting at the end of the month is still seen by market participants as virtually certain.

“A cut in July will be difficult to dodge given current market pricing but Powell may use the opportunity to manage expectations beyond the meeting,” said Craig Erlam, senior market analyst at OANDA, in a note to clients. “How successful he’ll be is another thing as investors don’t appear to want to hear it and may instead continue to apply the pressure going into the September meeting.”

Read: Could the Fed surprise the stock market by skipping a July rate cut? It’s not out of the question

On Tuesday, Powell gave opening remarks at a conference at 8:45 a.m. Eastern Time to discuss recent stress tests for banks. Vice Chairman Randal Quarles will speak at that same conference at 2 p.m. Eastern Time. St. Louis Fed President Jim Bullard and Atlanta Fed President Raphael Bostic are also due to make appearances elsewhere Tuesday.

Trade concerns may also be weighing on market sentiment, after the US announced new preliminary tariffs on certain steel imports from Mexico and China, pending an investigation into subsides, with a final decision due in November.

Meanwhile, a diplomatic dispute between Japan and South Korea, which has led to Japan imposing new export restrictions on three materials used in the production of advanced consumer electronics, appears to be worsening after comments Tuesday from South Korean Industry Minister Sung Yun-mo suggested the country will soon impose countermeasures, according to Reuters.

The dispute — over a Seoul court ruling allowing the seizure of some assets of Japan’s Nippon Steel & Sumitomo Metal Corp. to compensate South Korean citizens for forced labor during World War Two — could lead to added disruption in the global supply of smartphone and chips, analysts say. The PHLX Semiconductor index SOX, -0.01%   was down 0.3%.

“Japan’s decision to restrict exports on fluorinated polyimide, resist polymers and hydrogen fluoride is starting to resonate with the South Korean technology sector,” wrote Michael O’Rourke chief market strategist at JonesTrading, in a note, adding that Japan controls 80%-90% of these markets. “There is concern that the restrictions will hurt Samsung and Hynix’s chip production. The concern extends to US tech companies, which may see delays to the products they have manufactured in or parts sourced from South Korea.”

On the economic data front, the National Federation of Independent Business released its small business optimism index, which fell to 103.3 in June, from 105 in May. The decline follows gains in the previous four months, and remains above the historical average.

At 10 a.m. Eastern Time, the Labor Department will issue its estimate of employment openings in the U.S. in May, along with the rate at which Americans were hired, fired, or left their jobs.

Which stocks are in focus?

Shares of beverage maker PepsiCo Inc. PEP, -0.04%  were up 0.1% Tuesday, after reporting second-quarter results that topped expectations and affirming its full-year outlook.

Shares of Piper Jaffray Co. PJC, +0.55%   could be in focus, after a report in the Wall Street Journal that the firm is nearing a deal to buy Sandler O’Neill + Partners LP for $485 million in cash and stock. Piper stock rose 1.8% in early trade Tuesday.

Etsy, Inc. ETSY, +3.11%   announced its intention Tuesday to offer free shipping for customers with orders of at least $35. Shares were down 2.7% Tuesday morning.

Shares of Netflix Inc. NFLX, +2.13%   rose 1.5% Tuesday, after Raymond James reiterated its bullish call on the streaming video giant citing the record start for the new “Stranger Things” season.

How are other markets trading?

The yield on the 10-year U.S. Treasury TMUBMUSD10Y, +0.46%   note has edged up nearly 2 basis points, to 2.054%.

In Asia, stocks struggled, and the Hang Seng HSI, -0.76%  led decliners with a drop of 0.7%. European stocks SXXP, -0.60%  were under pressure, led by a 1.3% drop for the German DAX 30 index DAX, -0.97%  

In commodities markets, oil prices CLQ19, -0.23%   moved higher, while gold prices GCQ19, -0.44% fell 0.7%. The U.S. dollar DXY, +0.13% was higher, notably against the British pound GBPUSD, -0.4154%

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https://www.marketwatch.com/story/us-stock-futures-fall-as-investors-brace-for-comments-from-fed-chairman-powell-2019-07-09

2019-07-09 13:47:00Z
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