Every week we bring you the biggest currency, travel and business stories. This week: Canadian inflation is down, the average price of a home in the GTA is up, RBC cuts jobs despite larger than expected profit, Blackberry’s profits are below expectations, and Qatar Airways wants to buy American – but regulators have concerns.
Inflation in Canada
Inflation in Canada is at its lowest point since 1999. In May it fell to 1.3% year on year in May, slightly lower the 1.6% in April. Gas prices fell from 15% higher year on year in April to just 7% in May. Food prices also fell from a 1.1% increase to just 0.1%.
Bank of Canada should hold rates
Canada’s low inflation rate means that the Bank of Canada will likely not feel any urgency to raise rates. Higher interest rates generally lower inflation while also boosting the price of currency. Lower rates increase borrowing, spending, and economic activity, reduce the price of currency and increase inflation. If you are waiting until the CAD strengthens before buying foreign currency, then you may be waiting for a while.
Townhouse over $1 million
According to the Building Industry and Land Development the average detached home in the GTA is now going for an average asking price of $1,222,6999, up 40% from last year. A fully detached home is now asking, on average, $1,942,316, and condos are asking $604,683.
EU moves out of London
The EU has launched a competition among member states to determine the new home of key EU agencies – European Medicines Agency (EMA) and European Banking Authority (EBA) – currently based in London. Planning the relocation must be done prior to the official Brexit pullout deadline on 30 March 2019. Combined the two agencies employ about 1000 workers and the EMA alone had 36,000 visitors who booked over 30,000 hotel nights. The loss of the EBA combined with Brexit could be a major blow to one of the world’s financial capitals, and potentially to the GBP. The most logical new home for the EBA would be Frankfurt, home of the European Central Bank.
RBC Cuts Jobs
RBC has announced that it will cut 450 jobs, primarily from its downtown offices despite higher than anticipated Q2 profits. An RBC spokesperson told CBC news “We are making changes that focus on the capabilities that we need now and in the future to meet our clients’ evolving needs.”
Canadian company Blackberry reported a $671 million profit in Q1, lower than expected. The company had received a $815 million arbitration-ordered payout from Qualcomm. Blackberry shares fell about 6%.
Qatar wants to buy American
Qatar Airways is looking to buy 10% of American Airlines, which would cost about $2.5 billion. American Airlines is the world’s biggest airline. The proposal would trigger an antitrust review from the US government. Qatar Airways already owns part of British Airways. Major American airlines including American, Delta, and United have all accused Middle East airlines including Qatar, Emirates, and Etihad of receiving unfair, and illegal, subsidies from governments.
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