Aug. 2, 2019

Canada

  • Canada’s GDP rose 0.2% in May vs 0.1% expected. GDP is now up 3% annualized.
    • Oil & Gas was down 2.5% vs up 6.8% in April
  • The average Canadian household paid nearly $40,000 in taxes last year vs a combined $32,000 on clothing, food and shelter.
  • Alberta accounted for about 12.6% of Canada’s total agriculture output in 2018, behind Ontario (32.4%) and Quebec (21.8%).
    • Agriculture and agri-food were responsible for 2.5% of Alberta’s real GDP in 2018
    • Alberta’s agriculture and agri-food sector’s output has grown 80% since 1997
  • Sobeys is aiming to take 225 million plastic grocery bags out of circulation a year by banning them in their stores starting January 2020.

United States

  • The US Federal Reserve cut its benchmark interest rate by 0.25%, the first cut in more than a decade. Chair Powell said “it’s not the beginning of a long series of rate cuts” but he didn’t say it’s just one rate cut.
  • US added 164,000 jobs (expected 165,000) in July. Unemployment unchanged at 3.7%.
    • Hourly earnings were up 0.3% M/M, increasing to 3.2% Y/Y
  • US Treasury expects to more than double borrowing ($433 billion) in July – September, vs original estimate of $159 billion.
    • The budget gap increased 23% to $747 billion over the last 9 months.
  • The Trump Administration took steps to allow a pilot project allowing the importation of medicine from Canada to lower the cost of prescription drugs for Americans.
    • Many of Canadas drug purchase agreements forbid the re-export of drugs to other countries.
    • Health Canada has said earlier that the US market is too large to rely on Canadian imports to solve high drug costs
  • President Trump is imposing a 10% tariff on an additional US $300 billion worth of imports from China (including consumer technology and children’s clothing).
    • US and Chinese trade negotiations plan to meet in early September for the next round
    • Chinese imports of US soybeans in the last 6 months have fallen to the lowest 6-month level since 2004. Pork imports dropped 16% in June from May
    • China has said it “will have to take necessary counter measures”
  • The US and EU have formalized a deal to allow more US beef exports into the EU.
  • US plans to test new missile technology after withdrawing from international nuclear treaty.

International

  • Beijing issued a surprise ban on individual tourists from 47 Chinese cities traveling to Taiwan.
  • China began holding military exercises in the waters off of Taiwan this week.
  • A Chinese warship collided with a Taiwanese freighter Wednesday evening.
  • Chinese oil imports from Saudi Arabia have increased 64% to 1.89 million barrels per day to fill the supply gap from Iran.
  • North Korea continued testing short-range ballistic missiles by firing two missiles into the sea.
  • Japan has removed South Korea from its list of Trusted Export Destinations.
  • A second U.K. warship has arrived at the Strait of Hormuz in an effort to secure safe passage.
    • At least 20 ships have turned off their transponders while moving through the strait this month, others have altered their route away from Iran
  • Mexico said it will help Honduras create 20,000 jobs this year, seeking to slow migration.