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Toronto braces for G20 summit Call it The Anarchists' Convention. With apologies to author John Sayles, and by no means to belittle legitimate dissent and protest, but with so many competing agendas both outside and inside the G20 summit security fence, there has to be some anarchy.
Outside the fence, there are a host of protest issues, including poverty, the environment, labour, First Nations and minorities, mothers' rights, fair trade, energy security, health care, gender equality, and homosexual and transsexual rights. There are plans for two large demonstrations today and tomorrow near the site in downtown Toronto. There might even be some anarchists.
Inside the fence, there are a host of divisive issues. The Americans don't want the Europeans to slash and burn. The Europeans don't want other countries throwing fiscal caution to the wind, but they do want a bank tax. The Chinese want everyone to shut up about the yuan. And the Saudis want to keep the price of oil high.
The tensions dividing the summit leaders - key are stimulus spending versus austerity, and financial reform that includes a new global bank levy - are still running high. President Barack Obama reiterated yesterday that governments must keep the global recovery going. Europe's argument, led by German Chancellor Angela Merkel, who has pledged to cut €80-billion over four years, is that growth will be stimulated by fiscal prudence. "There are others who are not yet so convinced of this exit strategy," she said yesterday.
Read
- Europe debt crisis shows rifts in G20
- Streets quiet as Toronto braces for summit weekend
- Our G8/G20 coverage
- Kevin Carmichael's G8/G20 Global View summit blog
- MarketWatch.com: G20 unity fades along with global crisis
U.S. lawmakers agree on bank reform After a marathon session, U.S. politicians this morning reached a deal on legislation paving the way for a sweeping overhaul of the banking sector, the most widespread change since the 1930s. Congressional negotiators struck a deal that will now go to the House and Senate for final votes, and then to President Barack Obama. The reforms include the so-called Volcker rule, named for former Federal Reserve chief Paul Volcker, which bars banks from using their own funds for certain trading. It would also set rules that affect how banks can trade certain derivatives, forcing them to do so through subsidiaries. "This is about as important as it gets, because it deals with every single aspect of our lives," said Senator Christopher Dodd, chairman of the Senate Banking Committee. Read the story
See also: MarketWatch.com on Wall Street reformation
Yuan reaches new high As the financial reform deal in the U.S. helps set the stage for the summit, so does the fact that China's currency, a hot issue in a post-recession environment, surged today to a new high against the U.S. dollar. The People's Bank of China, making good on its promise to allow the yuan to appreciate, set the official level of the currency at 6.786, up 0.3 per cent from yesterday. Many countries, notably the United States, want Beijing to allow more flexibility in the currency, though yesterday President Barack Obama said it's too early to tell whether its promise will be enough in the longer term.
China's Canadian interest grows China's interest in Canada, and Canadian energy, is growing. On the day EnCana Corp. announced a deal with China National Petroleum Corp., President Hu Jintao said yesterday he wants to double trade with within a few years. "I have agreed with Prime Minister Harper that we should take active measures to make our countries' two-way trade volume reach a target of $60-billion by 2015," Mr. Hu said after a meeting with Mr. Harper in advance of the G20 summit.
Separately, EnCana unveiled a memorandum of understanding with CNPC that would see the two companies negotiate a joint-venture deal to develop EnCana natural gas holdings in the Horn River, Greater Sierra and Montney plays in northeast British Columbia.
"Upon completion of an agreement, [EnCana]would maintain operatorship of all developments (Montney, Horn River), with CNPC investing capital in order to gain an interest in the projects," said UBS Securities Canada analyst Matt Donohue. "By reducing the capital commitment, we expect [EnCana]will be able to generate stronger project returns while maintaining the goal of doubling corporate production over the next five years."
Read
- B.C. shale gas gets jump-start with big land auction
- Chinese president's visit a hopeful sign for strained Canadian relationship
U.S. GDP lower than believed The U.S. Commerce Department today revised its measures of the economy in the first quarter as consumers spent less than originally believed. The government brought down its estimate of GDP growth to 2.7 per cent from the earlier reading of 3 per cent.
Caution in the wind In Canada, RBC Dominion Securities analysts Mark Chandler and Kam Bath note, there's "caution in the wind" today. Their take: "After a week that included earthquakes, tornados and bomb scares - a respite may be in order. The obvious focus is on the G20 meetings, though after a string of disappointing activity releases and cautious statements this week on global financial risks, more thoughts are shifting towards the magnitude of the [Bank of Canada's]hiking campaign, with markets pegging the odds of a [quarter of a percentage point]increase on July 20 at 70 per cent or so this morning."
Magna postpones buyout vote Magna International Inc. said this morning it is postponing a shareholder vote on its controversial plan to buy out founder Frank Stronach's multiple-voting shares. The announcement follows an order by the Ontario Securities Commission to provide more information to investors before a vote on the $863-million deal. "We intend to work cooperatively with the OSC staff to address the commission's concerns and comply with the OSC's additional disclosure requirements," Vincent Galifi, chief financial officer of the auto parts giant, said in a statement. Read the story
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