Daily Pulse
One of our most accessible tools, this daily comment keeps you abreast of developments on the North American and international financial markets.
Michel Doucet
Vice-President and
Portfolio Manager
December 20, 2024
Canada
Investment bankers are urging Toronto-listed companies to buy a business or raise some money as deal volumes in Canada have fallen to their lowest levels in 23 years. Equity and equity-linked offerings in Canada fell for the third straight year to hit their lowest point since 2001, according to league tables compiled by Bloomberg. There were 236 deals in 2024, raising C$17.2 billion ($12 billion), compared with C$19.8 billion in 2023. The activity stands in sharp contrast to the US, where such offerings have climbed for the third straight year, data compiled by Bloomberg show.
Prime Minister Justin Trudeau will shuffle his cabinet Friday around midday in Ottawa, said a government official. The shuffle comes after the surprise resignation of his former finance minister, Chrystia Freeland, earlier this week.
United States
The Republican-led House rejected a temporary funding plan backed by President-elect Donald Trump on Thursday with just over 24 hours to go before a US government shutdown, capping an extraordinary two days in Washington that tested the limits of the incoming president’s power. Trump and key adviser Elon Musk had pressured GOP lawmakers, including threats to oppose them in the next election, to abandon an earlier bipartisan deal. Trump insisted Republican leaders add a provision waiving or raising the federal debt limit before he takes office. But the bill failed by a vote of 235 to 174, with 38 Republicans voting against it in defiance of both the president-elect and the richest man in the world. Nearly all Democrats voted against the spending package, which would have also suspended the debt ceiling for two years. Government funding will lapse Friday night without congressional action. The Trump-backed plan would set March 14 as the new funding deadline.
Europe
The Bank of England acted to counter market speculation on fewer cuts in borrowing costs, with three officials seeking an immediate reduction and the rest insisting they won’t slow down easing. The majority opted to keep the benchmark interest rate at 4.75% but reiterated their plan to deliver reductions in 2025. The decision sought to reverse a tide of repricing toward less BOE easing next year in the wake of data this week showing stronger-than-expected wage growth and still-stubborn inflation. The dovish tone was all the more marked in contrast to the US Federal Reserve, which renewed its focus on price risks on Wednesday. Investors added to bets for UK rate reductions in 2025 after the decision. Money-market pricing implied two quarter point cuts and a strong chance of a third.
Trump threatened the EU with tariffs if it doesn’t buy more US oil and gas. But with Europe bracing for a possible halt in flows of Russian natural gas through Ukraine on Jan. 1, he may be pushing at an open door. The US already supplies about 16% of EU needs and is a clear candidate to make up for some of the 18% supplied by Russia
Asia
Foxconn is pausing its pursuit of Nissan while the latter negotiates a potential tie-up with Honda, a person familiar said. It prefers to see if the two Japanese marques make legitimate progress toward a deal before deciding its next move.
China’s one-year bond yields plunged 17 bps to the lowest since 2003, just a few hours after sliding below the psychological barrier of 1%. The stars seem to be aligned for this year’s rally to extend well into 2025. China’s one-year and five-year loan prime rates were unchanged at 3.1% and 3.6% respectively, matching estimates.