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`Dramatic shift` in rate-hike expectations
OTTAWA -- The Greek crisis, together with market chaos, forced a "dramatic shift" in expectations of a Bank of Canada rate hike next month, a view reflected in a steep fall of the loonie Thursday on the belief that such increases might no longer be in the offing as panic spreads about Europe.
However, the guessing game on rates took another turn Friday morning after Statistics Canada reported a massive 108,700 job gain in April, the biggest percentage gain since 2002. The data blew past expectations and boosted the value of the Canadian dollar. Still, analysts indicate the jobs data is backward-looking, and does not take into account future developments on the European continent.
Worries that the spillover in Greece may contract credit growth in Europe and threaten the global economic recovery rattled investors on Thursday, with equity markets in North America sustaining deep losses and commodity prices falling.
And in a sign of concern reminiscent of the Lehman Brothers Holdings Inc. collapse, the London interbank offered rate - the cost of borrowing for banks from their peers - rose to its highest level since August, while the cost of protecting European bank debt against default surged to a 13-month high.
Read the full article here.
OTTAWA -- The Greek crisis, together with market chaos, forced a "dramatic shift" in expectations of a Bank of Canada rate hike next month, a view reflected in a steep fall of the loonie Thursday on the belief that such increases might no longer be in the offing as panic spreads about Europe.
However, the guessing game on rates took another turn Friday morning after Statistics Canada reported a massive 108,700 job gain in April, the biggest percentage gain since 2002. The data blew past expectations and boosted the value of the Canadian dollar. Still, analysts indicate the jobs data is backward-looking, and does not take into account future developments on the European continent.
Worries that the spillover in Greece may contract credit growth in Europe and threaten the global economic recovery rattled investors on Thursday, with equity markets in North America sustaining deep losses and commodity prices falling.
And in a sign of concern reminiscent of the Lehman Brothers Holdings Inc. collapse, the London interbank offered rate - the cost of borrowing for banks from their peers - rose to its highest level since August, while the cost of protecting European bank debt against default surged to a 13-month high.
Read the full article here.