Meng Trial And Implications of Brexit On Tap Monday
Two stories that have been making global headlines in the world of politics will be something for Canadian investors to keep an eye one today.
First, the extradition trial of Meng Wanzhou begins in British Columbia’s Supreme Court.
Ever since Huawei’s chief financial officer, who is also the daughter of the company founder, was arrested at Vancouver’s airport more than a year ago on an extradition request from the U.S. so she could face charges involving Huawei’s alleged violations of U.S.-imposed sanctions against Iran, Canada has been the target of retaliatory actions from China. These actions have come in the form of severe restrictions imposed on Canadian agricultural exports and the jailing of two Canadian citizens.
China’s foreign ministry has already called on Canadian authorities to drop the case entirely.
As the court proceedings begin today, one argument Meng’s legal team is expected to make is that the charges she faces – alleged violations of U.S. sanctions targeting Iran – is not a crime in Canada, as this country dropped its sanctions against that country in 2016.
There is a lot on the line for the federal government, which is in a very difficult position. The Liberal government had to act on the extradition request from the U.S., its greatest ally. But when China retaliated, Canada had expected the U.S. to come to its defence and stand up to China, a move that never happened. The result, has left the Canadian economy to suffer a major blow, and Canadian residents targeted.
The second world event that will be brought into focus for Canadian investors will be Brexit.
The British High Commission will provide an update in Calgary today on what Britain’s exit from the European Union will mean for Canadian business interests.
Britain is one of Canada’s top 10 markets for trade and one of the top five for Canadian investment, both involving billions of dollars annually.
Interest Rate Decision on Wednesday
The Bank of Canada is scheduled to make an interest rate decision on Wednesday.
It is expected, given the latest employment numbers from December that saw the creation of more than 35,000 that month, that the central bank will hold the interest rate at 1.75%, where it has been since 2018.
Watch the Loonie React To BoC Announcement Wednesday
The Canadian dollar could show some movement on Wednesday after the Bank of Canada unveils it interest rate decision and updates it economic outlook for the Canadian economy.
The loonie has strengthened against other currencies in 2019, especially the U.S. dollar. A stronger Canadian dollar has the effect of reducing Canada’s competitive edge in the export markets, which has a negative impact on the country’s overall economy. It is widely speculated that the loonie’s performance will be a subject of the central bank’s outlook update.
The Canadian dollar is down slightly this morning, trading at 76.51 cents against the U.S. greenback.
Latest Canadian Inflation Numbers Come Out Wednesday
Statistics Canada will unveil the latest inflation numbers on Wednesday with the release of its Consumer Price Index for December.
In November, inflation hit 2.2%, which was slightly above the Bank of Canada’s target of 2%.
Rogers Reports Wednesday
Rogers Communications Inc (TSX:RCIa) will report its fourth-quarter earnings before the opening bell on Wednesday.
The communications giant reported a $593-million profit last quarter, down slightly from the $594 million posted in the same quarter the previous year. Revenues in the last quarter were $3.75 billion, down from $3.77 billion during the same period the year before.
The wireless provided had reduced its outlook for 2019, announcing in October it would see revenues to drop by 1%. Previously, it had said revenues would jump between 3% and 5%.
Rogers stock closed last Friday at $66.28, down 0.6% from the previous day. In the past year, the stock has lost 8.6%.