Skip to main content

Canada's TIC report: On track, more or less!

The magic figure this month is $7.8 billion, that the capital inflow (mostly into T-bills).  Last month, the bulk of capital inflow was money market so this is a shift in the type of assets being purchased.  Interestingly, stocks investment inflow remain at "depressed" levels (still growing but getting very small).

One reason, is that foreign investors have already reached their equity capital allocation target for Canada (ok its possible -- and make more sense than other options), and are seeking safety in Canada's T-bill market.  As usual, the bulk of this fixed income is in the form of federal instrument (as opposed to provincials). This supports the thesis that foreign investors are "parking" their cash in Canada (rather than investing in Canada), looking for safety rather than income.  

Again the preference for ultra liquid T-bills (instead of T-bonds) speaks volume as to foreign investors' risk appetite.  One more headache for  the Bank of Canada.

Finally, the CAD is back to near parity (driven by last week's "risk-On" mentality).  Of course the real test for all this stuff is the October 23rd meeting in the EU on what to do with the crisis!  My bet: kick the can down the road... the "victory" in getting Hungary on board was, lets not forget, about the June EFSF.  It doesn't come close in resolving the problems now -- where its $3 or $4 trillion (thousand billion) that is needed.

I have always said that Canada is a second derivative country (we supply stuff to make stuff) and the events in China should not be discounted, housing sales have fallen by half (Chinese policy) in an effort by the central government to tackle inflation (running at 6% -- food inflation is around 13%, when the official inflation target is 4%).  This will reduce the demand for steel, concrete, wood and energy.  Several sector in which Canada is a dominant trading partner.  

It could get intersting

Comments

Post a Comment

Popular posts from this blog

Spray painting Taylor Swift G650 aircraft (updated)

 First, a bit of paint will not harm anyone.  These climate activities are going to learn two things in the next few days:  (1) Trespassing at an airport is a felony almost anywhere in the world.  That means criminal prosecution.   (2) removing paint from an aircraft is expensive.   So these climate activists are about to find out the reach of the British criminal system and it will not be pleasant, the UK has very strict laws about that, I would be surprised if cleaning the aircraft of all the paint will cost less than $100,000.     I am sure that when they planned (premeditation) this little show they had a very valid logic to doing this.  Tonight, they are probably realizing the depth of their troubles.   I understand that in the UK it's a minimum one-year jail sentence.    Also, good luck travelling with a criminal trespass charge against you.  I am relatively certain that the airline industry will ...
Post a Comment
Read more

Tariffs on inhabited Island

 Two seldom-visited islands, part of Australia, saw a massive increase in the tariffs they will face when exporting to the United States.   The 32,000 residents did not have much to say...being Penguines.   NO kidding, massive tariffs were imposed on Heard Island and McDonald Islands.  According to the Australian government, the last visitor to Heard was about a decade ago.   Never mind the 47% tariff on Madagascar, where the principal export is Vanilla and the GDP per capita is less than $500 a year. Not only a Stable Genus but evidently an administration that took all of two hours to proof the list of countries.    They also treated St Pierre & Miquelon, two islands part of France in the middle of the St Lawrence Gulf...
Post a Comment
Read more

Britain, France and Egypt

 The voters realize now that the Conservative Praty desire to return to 19th-century dominance has driven its hatred of the EU.  The voters realize now that departure from the EU has accelerated Britain's decline and may soon make it irrelevant.  At best it will have to kiss American arses to maintain its standing.  For this, the conservatives were punished.  The decline of Britain was inevitable, competition from Frankfurt and Germany in Finance was bound to grow.  The core of Europe (aka Germany) is aging quickly Macron seems to be winning his bet, the left alliance that won the legislative elections will not remain united for long, since they disagree on about everything.   The Far right though it was about to assume power is once again relegated to the back of the bus.   It may draw its own conclusions, but not all of these are good for France.  The far-right has won nearly 1/3rd of the electorate, that is not something to be ig...
Post a Comment
Read more