KUALA LUMPUR, July 30 (Bernama) -- Bursa Malaysia's key index closed at an intraday high today, supported by continued buying interest even as renewed geopolitical tensions and a weaker overnight lead from Wall Street following the US Federal Reserve's (Fed) decision to stand pat on interest rates weighed on broader sentiment. The Fed has decided to hold rates steady for the fifth consecutive meeting, with the Federal Funds Rate unchanged between 3.50 per cent and 3.75 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.84 points to 1,720.40 from yesterday’s close of 1,715.56. The benchmark index, which opened 1.14 points lower at 1,714.42, hit its lowest level of 1,710.69 in early trade before gaining momentum for the rest of the day. However, the broader market was negative with losers outpacing gainers 581 to 411, while 612 counters were unchanged, 1,173 untraded, and 87 suspended. Turnover declined to 2.49 billion units valued at RM2.25 billion from ...
Canada's economic growth in the third quarter is projected to be significantly weaker than the Bank of Canada's (BOC) forecast of 2.8% annualized growth, with economists suggesting it may come in at less than half of that estimate. Sluggish consumer spending, rising unemployment, and slower-than-expected export growth are contributing factors to the downgraded outlook.
Key Takeaways:
Lower Growth Forecasts and Rising Risks: The Bank of Canada had predicted a 2.8% GDP growth for the third quarter, driven by lower borrowing costs, increased exports, and higher household spending. However, economists now expect growth to be around 1% to 1.5%, reflecting weak consumer spending and a struggling labor market. If these projections hold, the central bank may be forced to consider larger interest rate cuts to stave off a potential recession.
Challenges in the Labor Market: The labor market has shown signs of strain, with unemployment hitting 6.6% in August, the highest rate in seven years (excluding the pandemic period). The number of hours worked has also declined, impacting income levels. This stagnation in the job market, compounded by the rapid growth of the immigrant population, has pushed per capita GDP to contract for five consecutive quarters.
Potential for Further Interest Rate Cuts: Given the weaker-than-expected growth, the BOC may need to revise its policy approach. With the central bank already reducing its key interest rate from 5% to 4.25% since June, some economists, such as David Doyle from Macquarie, suggest a further 50-basis-point cut in October could be possible. Additionally, doubts have been raised about the BOC's expectations for growth in sectors like the Trans Mountain Expansion (TMX) pipeline and motor vehicle exports, which may fall short of their optimistic projections.
Overall, the outlook for Canada’s economy remains uncertain, with growth likely to lag behind the Bank of Canada's forecasts and downside risks increasing amid ongoing economic challenges.
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