At the close of business last Friday, global equities were higher on the week as fears of a recession taking hold in the near term receded. The yield on the US 10-year note rose to 3.26% from 3.23% a week ago after trading as high as 3.36% midweek. The price of a barrel of West Texas Intermediate crude oil fell $2.25 to $86 after trading as low as $81.20 on Thursday. Volatility, as measured by the Cboe Volatility Index (VIX), was little changed at 23.

 

MACRO NEWS

It was with profound sadness that we all received the news on Thursday that Great Britain’s longest-serving monarch, Queen Elizabeth II, had died at the age of 96 at Balmoral Castle in Scotland. She had developed a deep bond not only with her subjects in Britain but also throughout her commonwealth. Since her passing, I have become even more aware of her selfless devotion, tireless work, and service to her commonwealth. The Queen saw it all in her reign and always stood as a steady hand as the world around her was in constant change. She had the respect of political and business leaders around the world who would look to her for guidance. One of her guiding principles was to “Keep Calm and Carry On.” She will be sorely missed.

 

CANADIAN ECONOMIC NEWS

This past week, the Bank of Canada raised rates 0.75% to 3.25%. Although the bank said more rate hikes may be coming, we expect they will be on hold for a while and we continue to believe rates may come back down in the second half of 2023. Again, if your cash flow can support a variable rate mortgage, we recommend staying with a variable rate.
Our labour market cooled for a third straight month in August as the economy shed nearly 40,000 jobs. Our unemployment rate jumped to 5.4% from 4.9% in July.

 

US ECONOMIC NEWS

US Federal Reserve Chair Jerome Powell warned that longer inflation remains elevated. We expect to see a 50 basis point increase from the Federal Reserve later this month. While the Fed is strongly committed to fighting inflation, we believe the US will probably be on hold for a while after the rate hike on September 21^st.

US weekly jobless claims continue to fall, suggesting the US labour market remains resilient. 222,000 new applications for unemployment benefits were filled in the latest week, the lowest level since May. The number of weekly claims peaked at 261,000 in mid-July.

 

EUROPEAN ECONOMIC NEWS

Amid 9.1% inflation, the European Central Bank on Thursday raised its deposit rate from 0% to 0.75%, the largest hike in its history. ECB President Christine Lagarde suggested several more larger-than-normal hikes are likely and also said inflation remains much too high. The ECB staff forecasts that inflation will fall from an average of 8.1% this year to 5.5% next year and 2.3% in 2024. The bank forecast that growth will moderate from 3.1% this year to 0.9% next year before rebounding to 2.3% in 2024. Lagarde ruled out providing liquidity to energy firms, calling on national governments to take that step.

 

JAPAN, CHINA and EMERGING MARKETS ECONOMIC NEWS

The People’s Bank of China cut its FX reserve requirement ratio this week in an effort to bolster the sliding yuan. The currency weakened to nearly seven per US dollar this past week before stabilising.

Australia’s economy grew a solid 3.6% year over year in Q2 amid strong consumer spending and booming energy exports.

 

BRAND NEWS

It is with great pleasure that this past week, the Dream Harbour team expands to welcome Senior Insurance and Estate Advisor, Joe Friedt. Joe has a strong desire we admire here at Dream Harbour: His ultimate goal is to make clients feel secure, stress-free, and safe. It’s a dream in perfect alignment with our own mission: We meet you where you are in life, and take you where you want to go.

Just take it from Joe: “What I love about Dream Harbour’s mission is that it plans with the client, not the product, first in mind. That’s what I do. I work with my clients to uncover what’s important, and I use that to give them clarity on their financial future. I make sure they’re looking forward to their future, not with apprehension, but with great anticipation.”

Welcome, Joe.

*PS: To learn more about Joe – check out our website, here: https://www.dreamharbour.ca/.

#HereYourDreamsAreSafe