CANADA ECONOMICS
SUMMIT OF AMERICAS
PM. Itinerary for April 12 to 14, 2018 Ottawa, Ontario - April 11, 2018
Note: All times local
Itinerary for the Prime Minister, Justin Trudeau, for Thursday, April 12, 2018:
Ottawa, Ontario
12 p.m. The Prime Minister will depart for Lima, Peru.
Canada Reception Centre (Hangar 11)
Macdonald-Cartier International Airport
Note for media:
Photo opportunity of departure
Lima, Peru
6:55 p.m. The Prime Minister will arrive in Lima, Peru.
Jorge Chávez International Airport
Note for media:
Photo opportunity upon arrival
Itinerary for the Prime Minister, Justin Trudeau, for Friday, April 13, 2018:
Lima, Peru
9:30 a.m. The Prime Minister will meet with the President of Peru, Martín Vizcarra.
Directorio 1 Room
4th Floor
Westin Hotel
Note for media:
Pooled photo opportunity at the beginning of the meeting
10:50 a.m. The Prime Minister will deliver remarks at the III CEO Summit of the Americas “Invest in Canada” session.
Plenary Room
3rd Floor
Westin Hotel
Note for media:
Open coverage
1 p.m. The Prime Minister will host a Caribbean Leaders Working Luncheon.
Huascaran Room
2nd Floor
Hilton Lima Miraflores Hotel
Note for media:
Pooled photo opportunity at the beginning of the lunch
3 p.m. The Prime Minister will meet with the President of Mexico, Enrique Peña Nieto.
Nasca Room
2nd Floor
Swissôtel
Note for media:
Pooled photo opportunity at the beginning of the meeting
4:15 p.m. The Prime Minister will meet with the President of the Republic of Chile, Sebastián Piñera.
Salkantay Room
2nd Floor
Hilton Lima Miraflores Hotel
Note for media:
Pooled photo opportunity at the beginning of the meeting
5:45 p.m. The Prime Minister will participate in the Leaders’ Arrivals.
Gran Teatro Nacional
Note for media:
Restricted pooled photo and host broadcaster
6 p.m. The Prime Minister will participate in the Official Opening Ceremony of the VIII Summit of the Americas.
Theatre
1st Floor
Gran Teatro Nacional
Note for media:
Restricted pooled photo and host broadcaster
8:30 p.m. The Prime Minister will attend a dinner given by the President of the Republic of Peru.
Government Palace
Note for media:
Official photo only
Itinerary for the Prime Minister, Justin Trudeau, for Saturday, April 14, 2018:
Lima, Peru
8 a.m. The Prime Minister will participate in the Leaders’ Arrivals.
Principal Hall
2nd Floor
Lima Convention Center
Note for media:
Official photo and host broadcaster
8:30 a.m. The Prime Minister will participate in the group photograph.
Plenary Room
1st Floor
Lima Convention Center
Note for media:
Restricted pooled photo and host broadcaster
8:45 a.m. The Prime Minister will participate in Plenary Session I.
Plenary Room
1st Floor
Lima Convention Center
Note for media:
Restricted pooled photo and host broadcaster
11:45 a.m. The Prime Minister will meet with the President of Argentina, Mauricio Macri.
Bilateral Room
1st Floor
Lima Convention Center
Note for media:
Pooled photo opportunity at the beginning of the meeting
12:30 p.m. The Prime Minister will meet with leaders of the Pacific Alliance.
Bilateral Room
1st Floor
Lima Convention Center
Note for media:
Pooled photo opportunity at the beginning of the meeting
1:30 p.m. The Prime Minister will participate in a working luncheon given by the President of the Republic of Peru.
Closed to the media
6 p.m. The Prime Minister will hold a media availability.
Mochica Room
1st Floor
International Media Centre
Note for media:
Open coverage
NAFTA
THE GLOBE AND MAIL. APRIL 12, 2018. U.S. makes big shift, cuts NAFTA auto-content demands
GREG KEENAN, AUTO AND STEEL AND AIRLINE INDUSTRY REPORTER
ADRIAN MORROW, WASHINGTON CORRESPONDENT
The United States has made a significant move in the negotiations for a new NAFTA treaty, reducing its auto-content proposal to 75 per cent from its previous demand that vehicles made in the region contain 85 per cent U.S. content in order to qualify for duty-free status.
Sources familiar with the talks confirmed the change in the U.S. demand Thursday. It was originally reported in Inside U.S. Trade.
The 75-per-cent level is close to the current level of North American content, which various industry experts have estimated at being between 70 per cent and 75 per cent, depending on the vehicle and in which of the three countries it is made.
Auto makers have not released the level of North American content in their individual vehicles, but have insisted since the U.S. proposal was first made late last year that the 85-per-cent level would be extremely difficult to meet.
The Americans had earlier dropped another proposal opposed vigorously by Canada and Mexico – that vehicles made in those two countries contain 50 per cent U.S. content to qualify for duty-free shipment into the U.S. market.
But U.S. negotiators have proposed that auto components manufactured in factories where wages are at least US$15 an hour carry a greater weighting when North American content is counted.
REUTERS. APRIL 12, 2018. Trump says no timeline for NAFTA talks, getting close to deal
WASHINGTON (Reuters) - U.S. President Donald Trump said on Thursday he was in no rush for negotiators to finish NAFTA talks but he thinks they are getting pretty close to a deal.
“It’s coming along great,” Trump told reporters at the White House, adding that he was not pushing for a deal to be concluded quickly on changes in the North American Free Trade Agreement.
“There’s no timeline. Agriculture is OK with NAFTA, not great. We’re going to make it great. We’re getting pretty close to a deal. It could be three or four weeks, it could be two months, it could be five months. I don’t care.”
Reporting by Doina Chiacu; Editing by Chizu Nomiyama
BLOOMBERG. April 12, 2018. Trump Threatens Endless Nafta Talks After Walk-Back on Autos
By Eric Martin, Josh Wingrove and Justin Sink
- U.S. is said to drop its proposed content requirement to 75%
- President says uncertainty is already hurting Mexico
Donald Trump says he’s willing to “renegotiate forever” on Nafta, a threat that comes as his trade office again softens its marquee demand for changes to the auto sector.
The president, speaking Thursday at the White House, said renegotiation of the North American Free Trade Agreement with Canada and Mexico is progressing well but there isn’t a timeline for reaching a deal -- in part because the uncertainty of talks is already discouraging investment outside the U.S. “As long as we have this negotiation going, nobody’s going to build billion-dollar plants in Mexico,” Trump said.
Despite his bluster, the U.S. has softened its negotiating position on the crucial issue of automotive content. American negotiators are now proposing that as much as 75 percent of car components be sourced from the three countries to quality for tariff exemptions under Nafta, down from its initial proposal of as much as 85 percent, according to three people familiar with the matter, who spoke on condition of anonymity because the talks are private. The development was first reported by Inside U.S. Trade.
It’s the latest concession by the Americans on the auto sector. The Trump administration is also said to have proposed tiers that allow more foreign content, while also dropping a demand for 50 percent U.S.-specific content. The three countries are running out of time to reach a deal that can be passed by the current U.S. Congress, while Mexican elections are also quickly approaching. Trump told U.S. lawmakers a Nafta deal is close, according to Senator John Cornyn.
Absent in Peru
The developments also come as U.S. Trade Representative Robert Lighthizer, Trump’s point-man on Nafta talks, scrapped a trip to the Summit of the Americas where he’d been due to meet with his Canadian and Mexican counterparts. Trump is also skipping the summit.
U.S. demands for reforms to Nafta’s auto sector rules have now changed substantially since being presented at the negotiating table last fall. Currently, 62.5 percent of a typical car and its major parts, and at least 60 percent of all parts, must be sourced from Nafta countries to be traded tariff-free under the pact.
Trump’s team at first proposed raising the content requirement to 85 percent, with a 50 percent U.S.-specific requirement. Its latest proposal envisions three tiers of parts, with the highest tier requiring 75 percent content, others requiring a lower level and no U.S.-specific requirement. Earlier this month it proposed five tiers.
The U.S. president regularly singles out the auto sector as a victim of Nafta’s status quo, and did so again Thursday by saying Mexico had “taken our auto industry by the throat.” Trump spoke while meeting with lawmakers from agricultural states, with major farm groups generally supportive of Nafta.
“We’re going to make it great and we’re pretty close to a deal. It could be three or four weeks, it could be two months it could be five months, I don’t care,” he said. “So the narrative of I’m pushing for a deal -- I never push for a deal. I don’t care. In fact if everybody in this room closed their ears I’d say that I’d rather terminate Nafta and do a brand new deal but I’m not going to do that because I’d rather everybody to be happy in this room, okay? So we’ll see how it goes."
The U.S. ambassador to Canada, Kelly Craft, said Thursday in Calgary she’s optimistic Nafta can be fixed and the three nations will be able to modernize the decades-old deal. “We all want a good outcome, and if our past is any indication, I’m confident that we’re going to have a very bright future.”
— With assistance by Andrew Mayeda, and Kevin Orland
INTERNATIONAL TRADE
EDC. APRIL 12, 2018. WEEKLY COMMENTARY. Export Outlook by Industry
By Peter G Hall, Vice President and Chief Economist
Industry is by and large a neutral noun, but not these days. It’s giving many the shivers on our neo-protectionist planet. Why? Well, anti-trade policy is not yet undoing trade agreements, and isn’t likely to because of the costs. But it is taking aim at individual industries, and it’s a radar screen that no industry wants to be on – especially if you happen to be in a trade-intensive economy like Canada’s. Amid trade policy turbulence, what’s the outlook, by industry, for Canadian exporters?
The economy is not the problem
Usually, protectionist rhetoric and policy moves occur when the economy is languishing. That was yesterday’s story, and is in our view the foundation for populist resentment of freer trade. In contrast, today’s growth laughs at backward-looking and backward-moving policies, complete with its soaring industrial output and plunging unemployment rates – occurring as they are in the very places where trade naysayers are most vocal. It’s a stunning juxtaposition; what are the actual impacts?
The ‘targets’ are aiming high
The aerospace industry is one that benefits from an upswing in global growth, as business travel accelerates and as rising disposable income boosts tourism. It was also among the first of Canada’s industries to get into the anti-trade crosshairs. Thankfully, the 300 per cent duties levied by the US Commerce Department were struck down by the US International Trade Commission. Uncertainty alone could upend export activity; not so in this case. Exports are forecast to rise smartly by 16 per cent this year, and to add a further 7 per cent in 2019.
Lumber is another embattled industry. Expiry of the Softwood Lumber Agreement with the US in October, 2015 led to announcements of stiff tariffs on Canadian producers about a year ago. That ought to be enough to shut things down – but it’s also up against a US housing market that is on the move. Starts of new dwellings are at their highest 6-month average level since the Great Recession – and there is still plenty of pent-up demand to spur the market to much greater heights. Canada is capitalizing: exports of forest products are forecast to rise 16 per cent this year, and to build that up by 2 per cent more in 2019.
Steel and aluminum were industries in a tizzy mere weeks ago when the US administration slapped tariffs on US-bound Canadian exports. True, we were given a temporary exemption but again, the turbulence can rattle activity. Metals are another case where the data argue the opposite: we see 13 per cent growth in 2018.
Market conditions to weigh on auto sector
Not all recipients of protectionist pronouncements can sport double-digit projections, though. The auto sector faces back-to-back years of virtually zero growth, as increases in parts shipments are offset by lower exports of assembled vehicles. Weakness is due to the long-anticipated unwind of assembly facilities and the peaking of US sales, and is not currently related to threats of increasing US content requirements or political pressure to invest stateside.
Other industries that will perform decently include industrial machinery and equipment, slated to expand by 9 per cent this year and 5 per cent in 2019. Revived mining activity and tight US capacity constraints are two key reasons for this impressive showing. Chemicals and plastics should also perform well, sectors that typically benefit from rising US – and global – industrial production.
Distribution of this growth across the provinces is understandably uneven. Both Alberta and Newfoundland & Labrador will benefit from the ramp-up of key energy projects. Quebec will also fare well, boosted by the performance of the aerospace and metals industries. Autos will keep Ontario muted, and the ups-and-downs of the agriculture sector will soften growth in both Manitoba and Saskatchewan.
The bottom line?
EDC’s latest Global Export Forecast shows that the free market is currently doing what it does best: overall growth is trumping anti-trade tactics, and for the time being, Canadian exporters are capitalizing on good times.
JOB VACANCIES
StatCan. 2018-04-12. Job vacancies, fourth quarter 2017
There were 470,000 job vacancies among Canadian employers in the fourth quarter, up 89,000 (+23.2%) from the fourth quarter of 2016, the largest year-over-year increase since the start of the series in 2015. Over the same period, the job vacancy rate rose 0.5 percentage points, reaching 2.9%.
The job vacancy rate represents the number of job vacancies expressed as a percentage of labour demand; that is, the sum of all occupied and vacant jobs.
This was the fifth consecutive quarter with year-over-year increases in both the number of job vacancies and the job vacancy rate. Job vacancies rose across most provinces, industrial sectors and occupational groups in the quarter.
Chart 1: Job vacancies have increased since the fourth quarter of 2016
Compared with the third quarter of 2017, the number of job vacancies and the job vacancy rate in Canada (both unadjusted for seasonality) were little changed in the fourth quarter. By comparison, the number of job vacancies and the job vacancy rate declined between the third and fourth quarters of both 2015 and 2016.
The average offered hourly wage for job vacancies was $20.10 in the fourth quarter of 2017, up $0.50 or 2.6% compared with the same quarter one year earlier. Overall, nearly 7 out of every 10 job vacancies were for full-time work.
Chart 2: Number of job vacancies in the third and fourth quarters of 2015, 2016 and 2017
Quebec and Ontario led growth in job vacancies
Compared with the fourth quarter of 2016, job vacancies rose in nine provinces, with the largest increases registered in Quebec and Ontario. Job vacancies were little changed in Newfoundland and Labrador, the Northwest Territories, and Yukon. Year-over-year increases in the job vacancy rate were also widespread across provinces.
Chart 3: In the fourth quarter of 2017, job vacancies rose the most in Quebec and Ontario
In the fourth quarter, employers in Quebec reported 29,000 (+46.1%) more job vacancies than in the same quarter a year earlier. Rises in job vacancies were widespread across industrial sectors, most notably in manufacturing; accommodation and food services; and finance and insurance. The job vacancy rate in this province rose by 0.8 percentage points to 2.6%, the largest increase among the provinces. Most economic regions (ERs) in this province registered notable year-over-year increases in their job vacancy rate, including Chaudières-Appalaches, where the rate was up 1.7 percentage points to 3.3%, and Capitale-Nationale, where the rate rose 1.4 percentage points to 3.1%. In these two ERs, the job vacancy rate in both manufacturing and in accommodation and food services recorded notable increases. Over the same period, data from the Labour Force Survey (LFS) showed that the unemployment rate in Quebec declined 1.1 percentage points to 5.5%, compared with a national rate of 6.0%.
Employers in Ontario had 28,000 (+17.3%) more job vacancies in the fourth quarter compared with a year earlier. At the same time, the job vacancy rate rose 0.4 percentage points to 3.0%. This was the sixth consecutive quarter with year-over-year increases in the number of job vacancies for this province. Vacancies rose in 15 of the 20 industrial sectors, including in health care and social assistance and in accommodation and food services. Job vacancies were up in all provincial ERs, led by Toronto, Hamilton–Niagara Peninsula, and Kitchener–Waterloo–Barrie. Within Ontario, occupations in sales and services saw the largest increase in job vacancies (+11,000), which was partly driven by a rise in food counter attendants, kitchen helpers and related support occupations.
There were 89,000 job vacancies in British Columbia in the fourth quarter, up 15,000 (+21.2%) from the same quarter in 2016. The job vacancy rate increased from 3.4% to 4.0% over the same period, the highest rate in the country. Increases in vacancies were broadly based across sectors, with the largest rises in accommodation and food services, as well as in construction. These increases helped raise the provincial job vacancy rate in these sectors to 6.3% and 5.7%, respectively. Lower Mainland–Southwest had the highest job vacancy rate, at 4.3%, while North Coast and Nechako had the lowest, at 2.3%. The Survey of Employment, Payrolls and Hours (SEPH) indicated that payroll employment in British Columbia grew by 3.6% over the same period, the fastest growth among the provinces.
Job vacancies in Alberta were up 8,900 (+20.9%) compared with the same quarter a year earlier, driven by increases in construction; transportation and warehousing; as well as mining, quarrying, and oil and gas extraction. Job vacancies in this province have increased on a year-over-year basis since the first quarter of 2017. The job vacancy rate in Alberta rose to 2.6%, a 0.4 percentage point rise from the fourth quarter of 2016. Increases were observed in all seven provincial ERs. Banff-Jasper-Rocky Mountain House and Athabasca-Grande Prairie-Peace River (3.7%) had the highest job vacancy rate, followed by Wood-Buffalo–Cold Lake (3.2%). According to the LFS, the unemployment rate in Alberta has trended downward since the end of 2016, following an upward trend that began at the end of 2014.
Among the smaller provinces, Prince Edward Island recorded an increase of 300 (+27.1%) job vacancies in the fourth quarter. The job vacancy rate rose 0.3 percentage points to 2.0%. This was the fourth consecutive quarter with year-over-year increases in the number of job vacancies and the job vacancy rate. According to the SEPH, payroll employment in the province grew by 3.3% between the fourth quarter of 2016 and the fourth quarter of 2017.
Rise in job vacancies in 8 of the 10 largest industrial sectors
Job vacancies rose in 8 of the 10 largest industrial sectors (in terms of employment) between the fourth quarter of 2016 and the fourth quarter of 2017, led by accommodation and food services and by manufacturing. Job vacancies in administrative and support services and in retail trade were little changed over the same period.
Chart 4: Job vacancies increased in 8 of the 10 largest industrial sectors in the fourth quarter of 2017
Job vacancies in accommodation and food services were up 12,000 (+25.0%) on a year-over-year basis, with the increase concentrated in Quebec, British Columbia and Ontario. The job vacancy rate in this sector rose 0.8 percentage points to 4.4% over the same period. The job vacancy rate in accommodation and food services has been among the highest across sectors since the beginning of the series in 2015, likely reflecting relatively high turnover.
The number of job vacancies reported by employers in manufacturing was 11,000 (+39.0%) higher compared with the same quarter a year earlier. At the same time, the job vacancy rate rose to 2.6% from 1.9%. Job vacancies were up in most subsectors, led by food manufacturing, fabricated metal product manufacturing, and transportation equipment manufacturing. According to the SEPH, payroll employment in this sector has steadily increased since the second half of 2016.
The number of job vacancies in health care and social assistance rose by 8,800 (+23.4%) in the fourth quarter, driven by broad-based increases across subsectors and provinces, most notably in Ontario. The job vacancy rate for the sector rose to 2.3% in the fourth quarter, up from 1.9% a year earlier.
There were 8,600 (+43.5%) more job vacancies in transportation and warehousing in the fourth quarter compared with a year earlier. Within the sector, truck transportation and support activities for transportation registered notable increases. Provincially, there were large increases in Ontario, Quebec, and Alberta. Over the same period, the job vacancy rate for this sector rose 1.0 percentage point to 3.6%.
Widespread increases in job vacancies across broad occupational categories
Job vacancies were up in 9 of the 10 broad occupational categories in the fourth quarter. The exception was occupations in art, culture, recreation and sport, where vacancies were little changed. For the third consecutive quarter, the largest year-over-year increases were in sales and service occupations and in trades, transport and equipment operators.
There were 175,000 job vacancies in sales and service occupations in the fourth quarter, up 33,000 (+23.2%) on a year-over-year basis. The proportion of vacancies for full-time work in this category was 49.5%, among the lowest across the 10 occupational categories. Provincially, the largest increases in vacancies in sales and service occupations were in Quebec, where job vacancies were up 64.0%, followed by Ontario and British Columbia. Job vacancies rose in many of the more detailed occupational groups within the category, particularly food counter attendants, kitchen helpers and related support occupations (+11,000). This occupational group has also been among those with the highest number of vacancies since the beginning of the series.
Chart 5: Job vacancies were up in 9 of the 10 broad occupational categories¹ in the fourth quarter of 2017
In the fourth quarter, job vacancies in trades, transport and equipment operators rose by 24,000 (+43.1%). The rise in vacancies is consistent with the increases observed in several related sectors in the quarter: manufacturing (+11,000), transportation and warehousing (+8,600) and construction (+6,100). Increases were widespread across the more detailed occupational groups, with motor vehicle and transit drivers; trades helpers and labourers; and machining, metal forming, shaping and erecting trades reporting notable rises. Across provinces, British Columbia and Alberta had the largest increases in vacancies in this occupational category.
Although the number of job vacancies was little changed in art, culture, recreation and sport in the fourth quarter, changes were observed in more detailed occupational groups within this broad category. Job vacancies rose in photographers, graphic arts technicians and technical and co-ordinating occupations in motion pictures, broadcasting and the performing arts (+700); while they fell in creative designers and craftspersons (-600). On a year-over-year basis, the average offered hourly wage in art, culture, recreation and sport rose 17.2%. Increases in both the offered wage and vacancies in photographers, graphic arts technicians and technical and co-ordinating occupations in motion pictures, broadcasting and the performing arts, an occupation group with relatively high offered wages, contributed to a higher offered wage for the broad occupational category.
FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/180412/dq180412a-eng.pdf
REUTERS. APRIL 12, 2018. Canada job openings, vacancy rate climb in fourth quarter
OTTAWA (Reuters) - The number of job vacancies in Canada rose in the fourth quarter compared to a year ago, with increased openings led by the accommodation and food services, and manufacturing sectors, data from Statistics Canada showed on Thursday.
There were 470,000 vacancies in the fourth quarter of 2017, up 23.2 percent from the fourth quarter of 2016. It was the largest annual increase since the series started in 2015.
The vacancy rate, which measures the share of unfilled jobs out of those available, rose to 2.9 percent from 2.4 percent.
A higher job vacancy rate generally points to economic growth. The country’s labor market was unexpectedly robust last year, but economists expect the rapid pace of jobs growth to slow in 2018.
Job openings rose in 8 out of 10 of the major industrial sectors, with vacancies in accommodation and food services up 25 percent from a year ago, and job openings in manufacturing jumping 39 percent.
Reporting by Leah Schnurr; Editing by Chizu Nomiyama
ECONOMY
Department of Finance Canada. 2018-04-12. Minister Morneau to Visit Hong Kong and Shanghai
Ottawa, Ontario — Minister of Finance Bill Morneau will travel to Hong Kong and Shanghai to meet with Canadian and local economic leaders to discuss Canada's Plan for Equality and Growth, and to hear perspectives on opportunities in Asian markets. He will also participate in the following public events, which media are invited to attend.
ITINERARY: https://www.canada.ca/en/department-finance/news/2018/04/minister-morneau-to-visit-hong-kong-and-shanghai.html
AVIATION
The Globe and Mail. REUTERS. 12 Apr 2018. Bombardier delivers five C Series jets in first quarter as delays ease
ALLISON LAMPERT, MONTREAL
VICTORIA BRYAN, BERLIN
Canadian planemaker Bombardier Inc. delivered five C Series jets in the first quarter and is making progress in tackling delays separate from previously disclosed engine holdups in producing its flagship C Series jets, sources familiar with the matter said.
The delivery data and comments from executives on progress come as Bombardier nears regulatory approval for its planned sale of the delayed C Series program to Europe’s Airbus SE. But the Montreal-based company could still face snags in coming months after delivering 17 C Series in 2017, down from an initial target of 30 – a delay the plane-and-train maker has previously attributed to delays at engine supplier Pratt & Whitney.
Bombardier has not publicly discussed separate delays stemming from general challenges as workers learn to make the 110to-130 seat jet more efficiently. These include “quality issues” at French interiors and seat maker Zodiac Aerospace, three sources familiar with the matter said, echoing similar problems affecting other planemakers.
It isn’t clear when Bombardier experienced these delays, but it delivered four planes in March, up from one during the first two months of the first quarter, one of the sources said. Another said there had been no new Zodiac delays. All of the sources spoke on condition of anonymity because of commercial sensitivities.
“It is well known across the industry that Zodiac is currently experiencing some production delays,” Rob Dewar, vice-president of Bombardier’s C Series program, told Reuters in a statement. “We are collaborating closely with their team, and we are making great progress, as reflected in our production rate of four aircraft last month.”
Zodiac, recently acquired by France’s Safran, the world’s thirdlargest aerospace supplier, is emerging from a three-year manufacturing crisis that drew criticism from plane makers Airbus and Boeing Co.
“We are very happy with the CSeries that are already flying with Swiss,” said Carsten Spohr, chief executive of Germany’s Lufthansa Group, the parent company of C Series launch customer Swiss International Air Lines.
“What we are not so happy about are the continuing delays to deliveries. The reason is not the engines, but other difficulties at Bombardier,” Mr. Spohr told Reuters. He declined to specify the reasons.
Bombardier hasn’t changed its target to deliver 40 C Series in 2018. It is expected to make firstquarter delivery data public in May.
Investors closely watch figures on aircraft orders and deliveries to help them accurately estimate revenues since airlines make the bulk of payments when planes are delivered.
Safran declined to comment on whether Bombardier had suffered delays. BOMBARDIER (BBD.B) CLOSE: $3.68, UP 3 ¢
BRAZIL
The Globe and Mail. BLOOMBERG. 12 Apr 2018. Investor darling Brazil is back on the ropes. The jailing of former president and election front-runner Lula has sunk markets. Protesters march against former Brazilian president Luiz Inacio Lula da Silva in Curitiba, Brazil, on Friday. Lula’s arrest all but eliminated the possibility of his return to the presidency.
PAULA SAMBO
ALINE OYAMADA
Brazil investors hoping the jailing of former president Luiz Inacio Lula da Silva would add fuel to a rally have been sorely disappointed.
The arrest of the front-runner in election polls all but eliminated the possibility Lula returns to the presidency in the October general elections, easing concern he would upend efforts to overhaul the economy. But the celebration in markets lasted less than a day. Since Lula’s arrest warrant was issued on Thursday afternoon, the real and stocks have lagged behind global peers.
Brazilian markets had already been underperforming, with the real weakening more than 4 per cent in the past month while an index of emerging-market currencies lost around 0.2 per cent. The Ibovespa stock benchmark, which earlier this year was hitting fresh records almost daily, has dropped more than 7 per cent in U.S.-dollar terms in the span, one of the world’s worst performances.
With Lula out of the picture, the election is wide open. There are at least a dozen potential candidates, whose policy proposals vary widely or are completely unknown. The field could still change amid widespread corruption allegations.
“There is no use in only taking Lula out, with that cancer that Brasilia is,” said Bernardo Rodarte, a money manager at Sita Corretora, which has 1.5 billion reais ($439-million) under management. “They arrested Lula, but nothing was solved. The outlook for the elections is still very bleak.”
Conservative Jair Bolsonaro, who leads polls excluding Lula, has enlisted a radical privatization proponent as his top economic adviser. On the left, Ciro Gomes – who has said he would tax the rich and undo government spending caps – is the only candidate that polls above 5 per cent. The middle ground, pro-reform group includes Henrique Meirelles, the market’s dream Finance Minister, former Sao Paulo governor Geraldo Alckmin and even President Michel Temer. All are struggling to gain ground.
While the external mood hasn’t helped Brazilian assets, with sell-offs being sparked by global trade-war fears and Russia concerns, much of the weakness can also be attributed to domestic drivers, according to Mauricio Oreng, a senior strategist at Rabobank in Brazil. Investors may be starting to worry more about the election, he said.
“We are driving with a very low visibility,” he said from Sao Paulo.
While some still think it will all work out in the end – Moody’s Investors Service raised its outlook on Brazil’s sovereign debt to stable on Monday, saying whoever wins October’s elections will pass fiscal reforms – some are beginning to raise alarms about the election not going investors’ way.
Political risk consulting firm Eurasia Group, which has become a key reference for Brazil investors since it was one of the few that correctly predicted Dilma Rousseff would be re-elected in 2014, isn’t so confident a reformist will win. The wide-open election comes as a consequence of broad popular rejection to anyone who looks like a traditional candidate, Eurasia co-founder Ian Bremmer wrote in a note to clients.
While “most elites” apparently think voters will move toward a more traditional candidate like Alckmin, there’s too much controversy around his team to make him a strong bidder, he wrote.
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LGCJ.:
