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Hi all,
If interested, you can receive these e-mails every day. If I remember correctly, I signed up for them at the RBC website.
RBC ECONOMICS RESEARCH - DAILY ECONOMIC UPDATE - November 28, 2008
Highlights of Canada`s Economic & Fiscal Update
There are a handful of economic reports today (Q3 current account, industrial and raw material prices for October), although attention will be squarely focused on Ottawa as the debate kicks off on the Economic & Fiscal Update, released at 4:00 p.m. yesterday. Go to www.rbc.com/economics/market/pdf/update08.pdfhttp://http://file://www.rbc.com/economics/market/pdf/update08.pdf for our commentary. While there are no explicit fiscal stimulus measures, the government has acknowledged the need for such and is planning to address the issue in the upcoming 2009 budget. The government`s priorities include: accelerating infrastructure projects, improving opportunities for workers and sectors affected by current economic conditions, strengthening financial markets and improving competitiveness.
Some of the highlights of the--fontc--> Update are as follows:
[*]The official budget balances projected in the Update are: C$0.8bn in 2008-2009; C$0.1bn in 2009-2010; and C$0.1bn in 2010-2011.[*]The government`s planning assumptions are based on average GDP growth of 0.6% in 2008 and 0.3% in 2009. Alongside such weak growth, the projected surpluses from last February`s budget would have been eliminated, yielding a roughly balanced budget in the current fiscal year, a deficit of C$5.9bn in 2009-2010 and a deficit of C$3.4bn in 2010-2011. However, the budget contains various "belt-tightening measures" that allow the government to project minor surpluses instead.[*]The outlined spending cuts (beyond the controversial elimination of the subsidies to the political parties) include caps on wage increases for the public sector and limits on pay equity, caps on growth in payments under the Equalization program and savings through its review of departmental spending. The government also is projecting revenues from its Insured Mortgage Purchase Program (IMPP) of some C$1.1bn in 2009-2010, declining somewhat thereafter, and asset sales are expected to total C$2.3bn in 2009-2010 and C$10bn in aggregate over five years.Other important measures include a temporary, 25% reduction in required withdrawals from tax-assisted savings plans (RRIFs) for seniors. The move helps to prevent some of the realized losses incurred from depressed asset prices.The government will double the solvency funding payment schedule for pension plans from 5yrs to 10yrs. This measure will allow pension plan sponsors to defer making very large "top-up" payments to cover funding shortfalls due to the recent decline in the market value of plan assets.Measures have also been put in place to ensure that the government will have more flexibility and a legal footing to directly address new liquidity and solvency measures for financial institutions. The borrowing limit for the Canadian Deposit Insurance Corporation (CDIC) has been increased to C$15bn and the CDIC would have the power to establish a bridge bank to "preserve banking functions". The government would seek explicit authority to inject capital into federal financial institutions where required and to fund any "unlikely draw" on the Canadian Lenders Assurance Facility (the government`s bank debt guarantee program). In addition, the government is proposing a C$350mn increase in capital for each of its Crown Corporation lending arms, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC).U.S. data breather
In a shortened trading day for both bonds and equities, with no speakers on tap and only one minor report (Milwaukee NAPM), markets will have a breather ahead of an extremely crowded data release calendar next week (ISMs, car sales, the Fed`s Beige Book and payrolls).
To view charts of today`s data, go to
http://www.rbc.com/economics/html_calendars/ca/calendar.html (Canada)
http://www.rbc.com/economics/html_calendars/us/calendar.htmlhttp://http://www.rbc.com/economics/html_calendars/us/calendar.html (United States)
The statements and statistics contained herein have been prepared by the RBC Economics Research based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This report is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.
If interested, you can receive these e-mails every day. If I remember correctly, I signed up for them at the RBC website.
RBC ECONOMICS RESEARCH - DAILY ECONOMIC UPDATE - November 28, 2008
Highlights of Canada`s Economic & Fiscal Update
There are a handful of economic reports today (Q3 current account, industrial and raw material prices for October), although attention will be squarely focused on Ottawa as the debate kicks off on the Economic & Fiscal Update, released at 4:00 p.m. yesterday. Go to www.rbc.com/economics/market/pdf/update08.pdfhttp://http://file://www.rbc.com/economics/market/pdf/update08.pdf for our commentary. While there are no explicit fiscal stimulus measures, the government has acknowledged the need for such and is planning to address the issue in the upcoming 2009 budget. The government`s priorities include: accelerating infrastructure projects, improving opportunities for workers and sectors affected by current economic conditions, strengthening financial markets and improving competitiveness.
Some of the highlights of the--fontc--> Update are as follows:
[*]The official budget balances projected in the Update are: C$0.8bn in 2008-2009; C$0.1bn in 2009-2010; and C$0.1bn in 2010-2011.[*]The government`s planning assumptions are based on average GDP growth of 0.6% in 2008 and 0.3% in 2009. Alongside such weak growth, the projected surpluses from last February`s budget would have been eliminated, yielding a roughly balanced budget in the current fiscal year, a deficit of C$5.9bn in 2009-2010 and a deficit of C$3.4bn in 2010-2011. However, the budget contains various "belt-tightening measures" that allow the government to project minor surpluses instead.[*]The outlined spending cuts (beyond the controversial elimination of the subsidies to the political parties) include caps on wage increases for the public sector and limits on pay equity, caps on growth in payments under the Equalization program and savings through its review of departmental spending. The government also is projecting revenues from its Insured Mortgage Purchase Program (IMPP) of some C$1.1bn in 2009-2010, declining somewhat thereafter, and asset sales are expected to total C$2.3bn in 2009-2010 and C$10bn in aggregate over five years.Other important measures include a temporary, 25% reduction in required withdrawals from tax-assisted savings plans (RRIFs) for seniors. The move helps to prevent some of the realized losses incurred from depressed asset prices.The government will double the solvency funding payment schedule for pension plans from 5yrs to 10yrs. This measure will allow pension plan sponsors to defer making very large "top-up" payments to cover funding shortfalls due to the recent decline in the market value of plan assets.Measures have also been put in place to ensure that the government will have more flexibility and a legal footing to directly address new liquidity and solvency measures for financial institutions. The borrowing limit for the Canadian Deposit Insurance Corporation (CDIC) has been increased to C$15bn and the CDIC would have the power to establish a bridge bank to "preserve banking functions". The government would seek explicit authority to inject capital into federal financial institutions where required and to fund any "unlikely draw" on the Canadian Lenders Assurance Facility (the government`s bank debt guarantee program). In addition, the government is proposing a C$350mn increase in capital for each of its Crown Corporation lending arms, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC).U.S. data breather
In a shortened trading day for both bonds and equities, with no speakers on tap and only one minor report (Milwaukee NAPM), markets will have a breather ahead of an extremely crowded data release calendar next week (ISMs, car sales, the Fed`s Beige Book and payrolls).
To view charts of today`s data, go to
http://www.rbc.com/economics/html_calendars/ca/calendar.html (Canada)
http://www.rbc.com/economics/html_calendars/us/calendar.htmlhttp://http://www.rbc.com/economics/html_calendars/us/calendar.html (United States)
The statements and statistics contained herein have been prepared by the RBC Economics Research based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This report is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.