Statistics Canada reported today that the Canadian economy grew by 0.1 percent in May. A jump in the cost of oil and gas was mostly responsible for the increase. Most other areas of the economy were flat, or actually lost ground, including construction which fell 1.6 percent, while the services industry declined 0.1 percent.
Sales of existing homes fell significantly in several parts of the country in May, resulting in an 11.3 per cent decrease in the output of real estate agents and brokers. It was the fifth consecutive monthly decline in this industry.
Source: The Canadian Press
In an interview with China Reform magazine, Yi Gang, China’s chief currency regulator, said that China has surpassed Japan to become the world’s second-largest economy. Gang also noted that depending on how fast its exchange rate rises, China is set to overtake the US economy around 2025.
Source: Reuters
As expected, Canada’s third quarter real Gross Domestic Product showed positive growth of 0.1 percent, officially ending the recession in Canada. The volume of imports and exports also increased during the quarter, and the output of services-producing industries increased 0.6 percent. Goods-producing industries however, fell 1.4 percent due mostly to temporary shutdowns in the mining and oil-and-gas extraction sectors.
The Canadian Press
Investors are turning their attention to the Swiss Franc and are using US dollars to fund the purchases in a new round of carry trades. Switzerland was second only to Australia in dealing with the fall-out of the global recession, and its economy is now forecast to shrink less than half as much as the euro region this year – 1.9 percent compared with 4 percent according to the Organization for Economic Cooperation and Development.
“There’s very substantial underlying demand for Swissie, generated by one of the developed world’s largest current- account surpluses,” said Paul Meggyesi, a currency strategist in London at JPMorgan Chase & Co., which turned bullish on the franc Nov. 24. “I fail to see the economic emergency which will motivate the SNB to continue to offset that pressure with very substantial foreign-exchange purchases.”
Bloomberg
