/Posthaste: TMX to complicate Liberal-NDP talks, and Canadians to splurge $1,600 on gifts this holiday season

Posthaste: TMX to complicate Liberal-NDP talks, and Canadians to splurge $1,600 on gifts this holiday season

Good Morning!

While Christmas is more than two months away, some canny Canadians are already eyeing shopping deals. The average Canadian will spend around $1,594 this holiday, a 1.9 per cent increase over last year, according to PwC Canada’s Holiday Outlook report.

“Eight out of ten Canadians plan to spend the same or more this holiday season and they are likely to focus the majority of their spending on family ($869), followed by indulging themselves with a few gifts ($537), gifts for friends ($118), pets ($40), and others ($29),” according to the report. Men are expected to spend $1,820 this year on gifts, travel, and entertainment, while women are expected to spend $1,384 on the same things, the report noted.

While the ‘R’ word is in the air in much of the world, Canadians remain fairly positive about the economy and the state of their personal finances. According to the report, 25 per cent of respondents are feeling better than last year about the state of their personal finances. “Despite recent announcements about household debt-to-income ratio rising, more than 80 per cent plan to use their credit card at some point during the holiday season. Only 17 per cent (vs 19 per cent in 2018) are concerned about credit card debt and 21 per cent are not worried about it,” the report noted.

May be they should worry a bit. RBC Capital Markets cut its price forecast for U.S. oil benchmark Western Texas Intermediate by around US$.375 to US$58.75 next year, noting that recent supply outages will compel many major oil consumers to stockpile barrels to mitigate the impact of sudden shortages.

“Following a plethora of outages this year, two investor camps have emerged. On one hand, wide-ranging catastrophic outages are no longer a hypothetical, a black swan or a fat tail, meaning that a supply risk premium has arguably never been more relevant,” wrote Michael Tran, commodity strategist at RBC Capital Markets. “On the other, the laissez faire attitude towards pricing in disruption risk has meant that the swift normalization of output has embolden the skeptics to question the need for a risk premium going forward.”

On the political front, a possible coalition between the Liberals and NDP would be complicated by Ottawa’s $4.5 billion purchase of the Trans Mountain pipeline.

Would Trudeau categorically deny that he would block the expansion of TMX in exchange for Singh’s support, asks NP columnist John Ivison?

Here’s what’s you need to know this morning:

  • September existing home sales at 9 a.m. ET
  • Bloomberg Nanos Confidence survey at 10 a.m. ET
  • Aphria Inc. holds conference call to discuss its first-quarter financial results
  • Cannabis retailer Fire & Flower Holdings Corp. holds its annual general meeting of shareholders
  • The School of Public Policy and its expert panel to discuss the ban on single use plastic and the lessons that can be learned from B.C., in Calgary
  • Artizia Inc. holds its second-quarter conference call with analysts

Canada posted another surprisingly strong month of job gains in a labour market that is on track for one of its best years on record.

The economy added 53,700 jobs last month, Statistics Canada said Friday in Ottawa, following a gain of 81,100 in August. Canada has now added 358,100 since December, the most in the first nine months of a year since 2002.

The strong print will only reaffirm Bank of Canada expectations that the economy has developed a certain amount of resilience to trade headwinds and global economic uncertainties, giving it ammunition to buck the global trend of lower interest rates.

However, Scotiabank, the job report is not as stellar as the headline suggests.

“Full time jobs were up by 70,000 while part-time employment fell by 16,300. It’s somewhat amazing that the job growth was so skewed toward full-time employment and yet total hours worked fell which must signal that the rest of the already employed portion of the workforce worked less,” wrote Derek Holt, vice president, head of capital markets economics.

“In my view, this overall report changes nothing about the risks facing the outlook for Bank of Canada policy,” the economist noted.

— Please send your news, comments and stories to [email protected]. — Yadullah Hussain @YAD_FPEnergy

With files from The Canadian Press, Thomson Reuters and Bloomberg


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