|Bid||76.31 x 0|
|Ask||76.32 x 0|
|Day's Range||76.00 - 76.67|
|52 Week Range||65.56 - 80.05|
|Beta (3Y Monthly)||1.10|
|PE Ratio (TTM)||12.13|
|Earnings Date||Dec 5, 2019|
|Forward Dividend & Yield||2.96 (3.89%)|
|1y Target Est||80.20|
MEDIA ADVISORY - TD Bank Group Executive to Present at the CIBC 18th Annual Eastern Institutional Investor Conference
Jeweler receives $20 million revolver for new technology and inventory and store remodel CHERRY HILL, N.J. , Sept. 17, 2019 /PRNewswire/ -- TD Bank, America's Most Convenient Bank ® , announced it acted ...
(Bloomberg) -- Monday’s oil spike blindsided many investors, but in one corner of quant land the fallout was particularly punishing.Systematic investors known as commodity trading advisors, whose strategies track price trends across assets, held record short positions in oil and gas futures before a drone strike in Saudi Arabia sent shockwaves through global markets, according to JPMorgan Chase & Co.Brent futures soared by the most since the first Gulf War in the attack’s wake, before settling just above $69 a barrel.The record surge is merely the latest domino to fall in a miserable month for CTAs, according to Nomura, after rising bond yields hit returns last week. The SG CTA index fell for a seventh day in eight on Sept. 13, putting it on track for its fourth-worst month this century.“CTAs have seen essentially all of their trades backfire, what with the mass unwinding of bearish trades and the momentum crash in bond futures since the beginning of the month, along with the surge in the price of crude oil yesterday,” Masanari Takada, cross-asset strategist at Nomura, wrote in a note to clients. Even in comparison with other major hedge fund strategies, the performance of CTAs “has deteriorated remarkably,” he said.The question isn’t why trend-followers missed oil’s record one-day spike -- the commodity has been trading sideways for months -- but whether the rally will be solid enough to lure the fast money onto the bandwagon.Strategists at JPMorgan say that’s likely to happen, which could further juice prices. “A similar contract uplift can occur once signals for the energy futures trend turns positive,” Marko Kolanovic and Bram Kaplan wrote in a note.Oil and gas contracts have soared through key moving averages, a sign there will be “significant short covering” by CTAs, they wrote. From a macroeconomic perspective, geopolitical tensions in the Middle East and recent progress in U.S.-China trade talks should add tailwinds.TD Securities strategists led by Bart Melek also say CTAs are likely to ramp up bets on Brent and WTI futures now that the contracts have breached estimated trigger levels.The sudden market gyrations further threaten what was shaping up to be a pretty good year for trend-chasing quants. The SG CTA Index was up 12% going into September, when the worst week for government bonds in nearly three years punished the cohort’s long positions in sovereign debt.Oil’s abrupt reversal has been particularly cruel. Both the SG CTA Index’s beta to crude -- or the portion of returns attributable to it -- and official positioning data show trend-followers and macro hedge funds were betting against the commodity, according to JPMorgan.Of course, thanks to 2019’s spirited stock and bond rally, trend-followers are still up 7% this year. Societe Generale’s index tracks a basket of 20 funds.Further declines in government bonds sparked by Wednesday’s Federal Reserve meeting could spell more trouble for the group, though.“If the Fed were indeed to take a hawkish turn, the situation would be nightmarish for CTAs,” said Nomura’s Takada.To contact the reporter on this story: Justina Lee in London at email@example.comTo contact the editors responsible for this story: Samuel Potter at firstname.lastname@example.org, Yakob Peterseil, Sid VermaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- What started out as a funding shortage in a key U.S. money market is now making it more costly to get hold of dollars globally.A sudden surge in the overnight rate on Treasury repurchase agreements that began on Monday continued Tuesday -- with the rate opening at 7%, according to ICAP.Although technical factors that have dumped more collateral into the repo market and siphoned cash out are likely the cause, the squeeze has raised the specter that the Federal Reserve may be struggling to control money-market rates. For long-time Fed watcher Lou Crandall of Wrightson ICAP, the dislocations are so worrisome that he says the Fed may for the first time in a decade this morning do its first overnight system repo to deal with the funding squeeze.“There is a significant risk” that the federal funds rate -- the Fed’s target for which is its key policy tool -- will on Tuesday exceed the 2.25% upper end of the central bank’s range, Wrightson analysts wrote in a note dated Tuesday.This is all filtering into a demand for dollars that is already showing up in swap rates from euros, pounds, yen and even Australia’s currency. As an example, the cost to borrow dollars for one week in FX markets while lending euros almost doubled.The squeeze may be short-lived -- with analysts pointing to a confluence of two factors for a sudden shortage of dollars -- but it still highlights the vulnerability of a key borrowing market.What happened was an unfortunate coincidence -- just as companies were withdrawing cash from money markets to pay corporate tax, a glut of new bonds appeared on the market as the U.S. government sold some $78 billion of 10- and 30-year debt last week.With just $24 billion of bonds maturing in the period, this became one of three occasions this year when the imbalance between debt redemption and cash needed to buy new Treasuries exceeded $50 billion.Suddenly there was a scarcity of dollars at the same time as a glut of Treasuries, which banks typically lend out to investors with spare cash through repurchase agreement. As a result, the overnight repo rate more than doubled to 4.75%, the highest level since December, according to ICAP pricing.“Repo pressure is almost entirely a settlement story with $54 billion of net supply in Treasury coupons landing on already very crowded dealer balance sheets,” Blake Gwinn, head of front-end rates at NatWest Markets, wrote in a research note. The tax deadline probably exacerbated the situation, he wrote.See Bloomberg QuickTake on the Repo Market hereThe increase in repo rates then pushed up the cost of holding Treasuries, leading the spread between two-year yields and interest-rate swaps to shrink on Monday.It wasn’t long after that that dollar-funding stress started showing up elsewhere, with the three-month premiums to swap currencies such as euros or yen into dollars jumping. Short-dated eurodollar futures dropped, and implied rates rose, as short-term funding rates climbed.Bigger ProblemsThe repo market remains vulnerable to short-term liquidity squeezes anyway due to structural issues, which often surface around year-end.“The culprit is the scarcity of bank reserves, which are the only asset that provides banks with intraday liquidity,” Priya Misra, head of global rates strategy at TD Securities in New York, wrote in a note. “Reserves have been declining since 2014 and we expect them to decline further as Treasury’s cash balance increases and currency in circulation grows.”(Updates with repo open.)\--With assistance from Alexandra Harris, Joanna Ossinger and Liz Capo McCormick.To contact the reporter on this story: Stephen Spratt in Hong Kong at email@example.comTo contact the editors responsible for this story: Tan Hwee Ann at firstname.lastname@example.org, ;Benjamin Purvis at email@example.com, Nicholas ReynoldsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
TD gives cardholders control and confidence with first-in-Canada security feature for credit cards
(Bloomberg) -- Gold rallied after a strike against Saudi Arabian oil facilities raised the possibility of retaliatory U.S. military action in the Middle East.Investors are seeking haven assets at the start of a week that will also see critical policy decisions from central banks including the Federal Reserve.Gold futures jumped as much as 1.3% as investors gauged the ramifications from the assault against the world’s top oil exporter, and palladium hit a fresh record. Secretary of State Michael Pompeo blamed Iran for the disruption; that charge was rejected by Tehran. Saudi Arabia said preliminary findings show Iranian weapons were used in the attack on one of its key oil installations, stopping short of directly blaming the Islamic Republic for the strikes.Bullion hit a six-year high this month as slowing growth and the U.S.-China trade war drove central bank easing, with geopolitical tensions playing a secondary role aiding prices. After reducing rates in July, the Fed is poised to cut again at its Sept. 17-18 meeting.Following the strike over the weekend, President Donald Trump pledged to help Middle East allies and said the U.S. is “locked and loaded depending on verification” that Iran staged the attack, raising the specter of a military response.“There’s still a bit of uncertainty on the oil attacks,” Ryan McKay, a commodity strategist, at TD Securities, said by phone Monday. “I think if you get Saudi Arabia coming out and formally blaming Iran, which could happen, I think that will generate more of a safe haven bid.”Gold futures for December delivery rose 0.8% to settle at $1,511.50 an ounce at 1:31 p.m. in New York, while silver gained 2.6% to $18.026 an ounce. Spot gold advanced 1%. On the New York Mercantile Exchange, platinum and palladium each rose more than 1% before reversing.Heading into this week, gold holdings in exchange-traded funds had shrunk for the first week in seven on signs that relations between Beijing and Washington were at last starting to thaw. The holdings fell 17.2 tons last week, the biggest weekly loss in tonnage terms since March 1, but they’re still near the highest level since 2013. Money managers also recently reduced net-long positions, highlighting a tug-of-war among bullion investors.“Gold and silver should be significant beneficiaries of the expected rush to safety, and the impending rounds of central bank rate cuts this week,” Jeffrey Halley, a senior market analyst at Oanda Corp., said in a note. “A continued escalation of tensions, or a move into outright hostilities in the Middle East, could see a $1,600 handle sooner rather than later.”To contact the reporter on this story: Ranjeetha Pakiam in Singapore at firstname.lastname@example.orgTo contact the editors responsible for this story: Phoebe Sedgman at email@example.com, Pratish Narayanan, Joe RichterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Investors rushing back to risk assets this month just got a reminder of the kind of simmering geopolitical threats out there. That could be good news for the dollar.The drone strike on one of the world’s biggest oil facilities over the weekend raises the specter of escalating tensions across the Middle East -- exactly the kind of scenario that typically fuels demand for assets denominated in the world’s reserve currency.“Any retaliatory measures by Saudi Arabia would inevitably lead to an increased geopolitical risk scenario, i.e. the demand for safe-haven currencies can be expected to remain buoyant,” wrote Marc-André Fongern, strategist at MAF Global Forex. “From a fundamental perspective, there is still hardly any alternative to the dollar.”Throw in still-festering trade tensions, record policy uncertainty, weak growth in Europe -- with no fiscal stimulus in sight -- and the continued outperformance of American markets, and the stage may be set for a new phase of greenback strength if the bulls have it right.Even after a September pullback, the dollar is the best performing G-10 currency this quarter, and the Bloomberg Dollar Spot Index remains close to levels notched two years ago. The latter gained 0.3% at 10:19 a.m. in New York on Monday as the drone strike in Saudi Arabia rippled through markets.The latest flow data underscore the kind of support the exchange rate is enjoying from global investors these days. Numbers from EPFR Global Data released last week show cash was piling into stocks amid the global bond sell-off, but beneath the surface it all headed one way: American equity funds attracted more than $17 billion in the week through Sept. 11. Shares in Europe, Japan and the emerging markets all recorded outflows.Trade WarAs the trade war drags on, haven demand for the U.S. currency is likely to continue, according to Ned Rumpeltin, the European head of G-10 currency strategy at Toronto Dominion Bank. He points out there have been several false dawns in the protectionist spat, and says it’ll be no surprise if that happens again.“The dollar remains the best house in a very bad neighborhood,” he said. “There are few places in the G-10 where the dollar can underperform.”Analysis from JPMorgan Chase & Co. and Goldman Sachs Group Inc. shows the dollar is getting a lift from weakness in developing nations spurred by fears of a slowdown in China.Absent a significant pick-up in risk appetite that diminishes the dollar’s flight-to-quality credentials, even fresh U.S. monetary easing would struggle to materially undercut the currency, according to Jane Foley, Rabobank’s head of currency strategy.Bear HuntThere remains plenty of ammo for dollar bears. The U.S. has twin deficits and the greenback is the most expensive G-10 currency based on the Bank for International Settlement’s real effective exchange rate.One of the biggest bulls -- HSBC Holdings Plc -- acknowledges risks are rising to its strong-dollar call issued in April 2018. In a recent note, it stress-tested the potential impact of three scenarios: fiscal stimulus outside America, thawing trade relations, and U.S. intervention to weaken the currency. They all pose “serious negative consequences” for the greenback, HSBC said.But nominal rate differentials matter in a world where more than $13 trillion of bonds globally yield below zero.Around 60 trillion yen ($560 billion) Japanese government bonds with a coupon of over 1% will mature within three years and that money is likely to be reinvested in U.S. bonds where the whole curve is still positive, said Naoya Oshikubo, a senior economist at Sumitomo Mitsui Trust Asset Management. The company is one of the managers of Japan’s Government Pension Investment Fund, the world’s largest.“The dollar will be well supported because of these flows,” Oshikubo said.Japanese investors bought 2.47 trillion yen of U.S. government bonds in July, the most since 2016, according to the latest data.“The dollar is still ticking a lot of boxes for a currency to be long: high liquidity, high security, high yield. Its economic situation still better than others,” said Andreas Koenig, head of global foreign exchange at Amundi Asset Management. “It’s difficult to find attractive alternatives.”To contact the reporters on this story: Anchalee Worrachate in London at firstname.lastname@example.org;Samuel Potter in London at email@example.comTo contact the editors responsible for this story: Samuel Potter at firstname.lastname@example.org, Sid Verma, Mark TannenbaumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- One of Patrick Byrne’s last acts at Overstock.com Inc. is making life difficult for the short sellers he was forever battling.Shares of the online merchant are on a tear, up about 60% in two weeks. The rally coincides with a flurry of short covering that comes a week before the record date for an exotic dividend the company unveiled to much fanfare and confusion last month.Overstock’s flamboyant founder may be gone, having stepped down Aug. 22 after saying he got enmeshed in a government spy probe, but vestiges of his two-decade-long war with detractors linger. The latest twists have been manna for the stock’s true-believer longs, kicking up Twitter skirmishes while pushing the envelope of another Byrne obsession, blockchain.Data from S3 Partners, a financial analytics firm, show that about 6% of the 13.2 million shares borrowed by people betting against Overstock have been bought back in the past three business days. Shares fell for the first time in eight days Friday in volume that was three times the recent average.“There’s been a serious acceleration of short covering just recently,” said Ihor Dusaniwsky, managing director of S3. “To have that much short covering in that amount of time is responding to an event that’s changing people’s trading strategies.”In a short sale, a bearish trader sells borrowed stock, hoping to buy it back at a lower price, return it and pocket the difference. Frantic buying to close such positions is termed a “squeeze” and can boost shares rapidly.While other reasons may exist for the rally, one explanation centers on a blockchain-based “digital security” that Overstock said on July 30 it would grant to shareholders of record on Sept. 23 as a dividend. Because the security could prove hard for others to lay hands on, the potential exists for it to snarl the process by which shorts maintain positions.Stocks all over America have been benefiting last week from rushed purchases by bears as equities marched back toward records. Overstock’s case may be different. Its 65% rally since Sept. 3 stands out even in a market as volatile as this one.The theory behind the squeeze is technical but comes down to the obligation a short seller faces to pass dividends back to whomever lent him shares. That may prove difficult in Overstock’s case because the so-called “Digital Voting Series A-1 Preferred Stock” it promised in July is unregistered, will trade only on a blockchain exchange owned by a subsidiary, and may face restrictions on transfer.“You can expect a lot of buy-to-covers before the record day,” said Dusaniwsky. The 764,000 shares bought back since Sept. 10 are “the tip of the iceberg if people are wary of how the dividend settles out,” he said.Pressure on shorts would conceivably ease if the firms that lent shares were to accept something else in lieu of Overstock’s digital security -- cash, for instance. Dusaniwsky said brokerages he’s spoken to “are trying to figure out” how to handle it.A spokeswoman for Nasdaq, the exchange where Overstock shares trade, declined to comment. Overstock didn’t respond to an email seeking comment.“It’s a complex situation and we’re trying to help our clients figure out the best course of action,” said JJ Kinahan, chief market strategist at TD Ameritrade. As for the rally, he said: “If you’re short the stock, how are you going to deliver crypto? You have no way of delivering it, so you’re like, ‘OK, well I have to cover this stock because I can’t deliver the dividend.”’Whatever’s causing it, a rally this extreme puts anyone betting against a stock in difficult straits. That’s unlikely to bother Byrne, the 56-year-old founder who over the years espoused conspiracy theories about Wall Street and the evil “Sith Lord” hedge fund manager who conspired to take him down.Until recently, parts of the bear case on Overstock were Byrne himself. Before stepping down, he claimed in a series of public announcements that entanglements with the “deep state” that included cooperating with law enforcement agents he called “Men in Black” with their “Clinton Investigation” and “Russia Investigation.” Byrne said he’d been romantically involved with Maria Butina, a Russian operative jailed for failing to register as a foreign agent.The digital dividend was mentioned by Saum Noursalehi, CEO of Overstock’s tZero unit, in a Sept. 6 letter to shareholders published on Business Wire.“Given the digital preferred shares trade exclusively on the PRO Securities ATS, broker-dealers representing Overstock common shareholders will need to subscribe to the PRO Securities ATS in order to allow their clients to transact the dividend directly,” he wrote. “Introducing more investors to the platform is a key priority and this announcement should serve as a catalyst for enhancing liquidity.”To contact the reporters on this story: Jeran Wittenstein in San Francisco at email@example.com;Sarah Ponczek in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Chris NagiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
TORONTO , Sept. 12, 2019 /CNW/ - A new TD Bank Group (TD) survey reveals that a majority of Canadians (72%) are comfortable with companies using artificial intelligence (AI) if it means they'll receive better and more personalized service, but 68 per cent admit that they don't understand the technology well enough to know the risks. "The trust that our customers place in us is central to our innovation philosophy, no matter which set of technologies we're exploring," says Michael Rhodes , Group Head, Innovation, Technology and Shared Services at TD. "As the adoption of AI develops and continues across financial services, we believe this is a critical time to advance an industry-wide discussion that moves beyond principles to create world-class services for Canadians in a responsible way.
TD Asset Management Inc. expands alternative investments lineup with launch of TD Greystone Real Asset Pooled Fund Trust
/R E P E A T -- Media Advisory - TD Bank Group Executive to Present at the Barclays Global Financial Services Conference/
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. News the U.S. employment picture was decent if less robust than hoped in August kept equity futures elevated as traders saw the report as cementing more stimulus.The economy added 130,000 jobs, trailing the average estimate, while the unemployment rate held at 3.7% and hourly earnings were higher than forecast. It came out four hours before Federal Reserve Chairman Jerome Powell speaks on monetary policy in Zurich. Here’s how strategists and traders reacted:Dennis DeBusschere, head of portfolio strategy, Evercore ISI.This is bullish -- keeps aggressive Fed (Powell is not rewriting his speech at 12:30 today on this number). Rates should be sideways and curve should steepen. It’s positive for equities as the report speaks to longer expansion. It’s positive for the same things that have worked (tech). Cyclicals fine on the day if risk assets move up, which they should. Given all the other consumer/employment readings have been strong, people will likely discount the headline miss -- especially given the huge jump in household employment.Candice Bangsund, portfolio manager, Fiera Capital. The headline number was a mixed bag -- something for both the hawks and the doves. What was encouraging is the jump in hourly earnings, particularly for inflation backdrop. We’re likely to see another insurance cut in September and it’s largely priced in. It may be a bit of a hawkish cut in that the Fed will signal in that it’s not the beginning of a easing cycle and going forward they’ll be in a wait and see mode. The numbers in the U.S. We’ve been seeing isn’t consistent with a) the recession and b) four rate cuts the market is pricing it.Bruce Bittles, chief investment strategist, Robert W. Baird. The print almost guarantees that the Fed is going to cut rates by 25 points. Yesterday’s ADP was higher than expected and if today’s jobs numbers were higher, there could be a lot of questions about whether the Fed was going to cut rates this month. The print doesn’t change anything, it solidifies the fact that the Fed is going to lower rates. Powell speaks later today. The Fed has pretty well signaled its stance on interest rates, Powell may confirm that today or make a little stronger statement.Tony Bedikian, head of global markets, Citizens Bank.Today’s jobs report shows the resiliency of the United States economy despite several global headwinds. The on-again, off-again U.S.-China trade talks continue to roil markets and, in some ways, are mirroring the on-again, off-again Brexit debate. Both issues are providing market participants with more theater than substance while the U.S. consumer tunes them out, keeps spending and keeps the U.S. economic fundamentals on track.JJ Kinahan, chief market strategist, TD Ameritrade. We’re light on the number. August is always a strange report anyway. The reason I say that is because you have some of the summer jobs that are sort of rolling off as kids go back to school or the resorts or whatever that may be open in the summer that aren’t the rest of the year. You also have the anomaly of the government hiring 25,000 workers for the census. You normally don’t see that.Ilya Feygin, senior strategist, WallachBeth Capital LLC.The weak payrolls and higher hourly earnings are slightly negative for equities because they force us to deal with a slightly weaker economy but do not change the central bank rate path at all in our view. We would expect an eventual downtick in S&P futures to the 2,970 area where they found support last night and then the 2,950/2,954 area.Marvin Loh, global macro strategist, State Street. It certainly shows that the jobs market ultimately is slowing but it isn’t rapidly compressing yet at this point. Past mid-cycle, more towards late-cycle but it definitely doesn’t seem that it’s a late, late cycle yet. This one’s got a little bit in it for everybody.To contact the reporters on this story: Elena Popina in New York at firstname.lastname@example.org;Vildana Hajric in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Chris NagiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
CHERRY HILL, N.J., Sept. 5, 2019 /PRNewswire/ -- The TD Charitable Foundation, the charitable giving arm of TD Bank, America's Most Convenient Bank® today announced it is donating $100,000 to Hurricane Dorian relief efforts across the Bahamas. "The people of the Bahamas are struggling to recover from one of the most devastating hurricanes to ever hit the region," said Nick Miceli, TD's Regional President, Florida. Additionally, TD Bank is offering assistance to employees and customers impacted by Hurricane Dorian from Maine to Florida through TD's Disaster Relief Program.
NEW YORK, Sept. 4, 2019 /PRNewswire/ -- TD Bank, America's Most Convenient Bank®, today announced that it is launching a new program to enable individuals to re-enter the financial services industry following a career break. Working with iRelaunch, a leader in creating successful career re-launch programs, TD's Commercial Bank will offer a career program for return-to-work professionals in the metro New York City area who have been out of the traditional workforce for two or more years. This program, which is a first for TD Bank, offers professionals a successful pathway back into financial services.
/R E P E A T -- Media Advisory - TD Bank Group Executive to Present at the Scotiabank Financials Summit/
Media Advisory - TD Bank Group Executive to Present at the Barclays Global Financial Services Conference
(Bloomberg) -- Argentina imploded. Beijing let the yuan slip to the lowest in at least a decade. Global central banks signaled they’re spooked about slowing growth by rushing to cut rates. By almost any measure, August was a month to forget for emerging-market investors.Consider the following: Developing-nation currencies had their worst August in at least 22 years, puncturing a carry trade bet that had just begun to turn positive. Investors yanked so much cash from exchange-traded funds that flows are poised to turn negative for the year. On top of that, dollar-bond sales fell to a 42-month low.Malcolm Dorson, who helps manage $640 million of emerging-market funds at Mirae Asset Global Investments in New York, says it’s a good thing he took time off with his family earlier in the summer.“The stress on currencies and price movements kept managers on their screens,” he said. Investors have “to be on the ball either to take advantage or re-position, all while staying in front of your investors. I’m sure many trips were canceled or postponed.”All told, emerging-market stocks erased $873 billion in market value in August as the U.S.-China trade war rattled on. Bears tripled the money on bets that developing-nation equities will see further declines, handing the iShares MSCI Emerging Markets Exchange Traded Fund its biggest-ever surge in short interest.“September will be more of the same,” said Brendan McKenna, a foreign-exchange strategist at Wells Fargo Securities LLC in New York. “Even though China laid out their retaliation plans, it wouldn’t surprise me if they got even more aggressive with countermeasures.”READ: August Chaos Has U.S. Treasury Returns Set for Post-Crisis HighsThe month’s travails actually started on the last day of July, when the Federal Reserve cut interest rates for the first time in more than a decade. In itself, that was no surprise -- yet riskier assets slid and the dollar rallied as Chair Jay Powell downplayed hope the move marked the start of a sustained easing cycle. Developing-world currencies, on a mostly upward slope since May, crumbled since then and are now hovering at their lowest since November.Don’t blame the Fed entirely, though. Even the U.S. central bank says there are some growth levers it can’t control. Take the U.S.-China trade war: Only this month, Beijing let the yuan fall below 7 to the dollar and announced fresh tariffs on U.S. goods, retaliating against levies imposed by President Donald Trump, some of which are set to go into effect Sept. 1. As Trump and Xi Jinping hurled escalating threats, while still hinting at optimistic negotiations, the JPMorgan Emerging Markets Volatility Index jumped by the most since December 2014.Fallout from the trade battle put more pressure on growth and pushed policy makers in at least 12 countries, from Thailand and Indonesia to Sri Lanka and Peru, to follow the Fed’s lead and reduce rates. Mexico surprised some analysts with its first cut in five years and Egypt trimmed its benchmark rate by 150 basis points, more than the 100 expected. A lack of good fundamental data weighed on developing-market assets in the month, said Sacha Tihanyi, deputy head of emerging-market strategy at TD Securities.True, some developing nations were spared the full force of the trade fallout. The Thai baht was the lone developing-nation currency that managed to stay in the green against the dollar in August, reflecting its insulation from China and its trade drama, according to Wells Fargo’s McKenna.“There is definitely damage that’s been done,” said Eric Baurmeister, who helps manage $12 billion in emerging-market debt at Morgan Stanley Investment Management Inc. in New York. “The benefit of doubt is gone, and the market needs to see documents signed, trade deals done before they get really excited.”It wasn’t a pretty month in South Africa, where the rand posted its worst performance since February and currency volatility jumped by the most in 2019 as the nation narrowly avoided a recession. Investor attention focused on the troubled utility, Eskom Holdings, as government efforts to ease its debt burden by selling some power plants immediately ran into resistance.In Turkey, meantime, the lira halted a three-month rally and fell more than 4% as the nation struggled to recover from recession. Economists cut Turkey’s 2020 growth outlook to 2.1%, almost half of the estimates they had made in June last year.Then there was Argentina’s stunning presidential primary result. Opposition candidate Alberto Fernandez trounced incumbent market darling, Mauricio Macri, in the primary vote, causing the peso to lose a quarter of its value in three days. The nation has since poured its foreign reserves into propping up the currency and is seeking a “voluntary reprofiling,” with a plan to push out maturities on $101 billion of debt.READ: Argentina’s Dire Month: From Dry Run Election to Quasi DefaultNow, as the Labor Day holiday begins in the U.S., Mirae’s Dorson said he won’t stray far from his screens. “Middle East markets are open on Sunday and most of the world is working Monday, so I’ll be watching and online all weekend,” he said.To contact the reporters on this story: Sydney Maki in New York at email@example.com;Srinivasan Sivabalan in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Julia Leite at email@example.com, Alec D.B. McCabe, Brendan WalshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Canada’s economy recorded a stronger-than-expected rebound in the second quarter as exports recovered, but surprisingly weak consumption and business investment will cast doubts on the expansion’s sustainability.Output grew at an annualized pace of 3.7% in the three months through June, Statistics Canada said Friday in Ottawa, up from a paltry 0.5% increase in the first quarter. The rebound follows two straight quarters of hardly any growth. The period also ended better than expected, with a monthly expansion of 0.2% in June.The underlying details, however, were less impressive. The rebound was driven by the fastest quarterly increase in exports since 2014, but growth in household consumption came to a near halt despite strong gains in incomes, and business investment shrank by the most in more than two years. As a result, domestic demand contracted in the second quarter.That could be a signal of growing unease among households and businesses about global economic conditions, fueled by concerns over the U.S.-China trade war and potentially foreshadowing a sharper slowdown in the second half of the year. Policy makers at the Bank of Canada may look through some of the strength in the report.“This was a ‘less than meets the eye’ report,” Brian DePratto, senior economist at Toronto-Dominion Bank, said in a note to investors. “Not only were today’s details weak, but since the second quarter ended we’ve seen yet another escalation in the trade wars and associated uncertainty.”Possibly reflecting concerns about the outlook, businesses met some of the pickup in foreign demand by drawing down inventories, rather than boosting production. The strong gain in exports, meanwhile, is seen as only temporary, reflecting a ramping up of shipments after a sluggish winter. Exports had slumped sharply earlier this year because of curtailments on oil production and other temporary issues, prompting many businesses to stockpile.DePratto said he expects the Bank of Canada to join the global trend toward easing monetary policy in October, an increasingly likely scenario according to swaps trading. A second cut is being priced in by investors sometime next year. The next rate decision is Sept. 4, when policy makers aren’t expected to move but will likely strike a more dovish tone. Friday’s GDP numbers beat the bank’s 2.3% forecast, and economists had predicted a 3% increase.The stronger-than-expected headline figure boosted the Canadian dollar. The loonie was up 0.2% to C$1.3255 per U.S. dollar at 10:04 a.m. in Toronto.‘Solid Increase’Despite the worrying details, the Canadian economic expansion in the second quarter was still impressive -- growing the most in two years at easily the fastest pace in the Group of Seven. The U.S. economy expanded by an annualized 2% over the same period.Shipments by Canadian exporters rose at a 13% pace, contributing more than 4 percentage points to growth. A drop in imports also added to the expansion, as more of the nation’s demand was used to buy domestically produced goods and services.Housing investment, meanwhile, recorded its first gain in six quarters.It’s the sort of data that make the case for cheaper money less compelling in Canada than it is elsewhere. Even two cuts over the next 12 months will still leave the country with the highest policy rate among advanced economies.“The solid increase in the headline numbers leaves our call intact for the Bank of Canada to remain patient on cutting rates for the next few month,” said Royce Mendes, an economist at Canadian Imperial Bank of Commerce, which expects a cut in January.(Updates with analyst comments.)\--With assistance from Erik Hertzberg.To contact the reporter on this story: Theophilos Argitis in Ottawa at firstname.lastname@example.orgTo contact the editors responsible for this story: Theophilos Argitis at email@example.com, Stephen WicaryFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.