Canadian provinces brace for rising U.S. borrowing costs
Canadian provinces are bracing for rising borrowing costs as looming U.S. tariffs threaten to curb economic growth. Bloomberg reported that shrinking trade could lead to lower provincial tax revenues, potentially higher borrowing needs and lead to higher provincial debt risk premiums. Also read: U.S. companies hoard Chinese goods amid tariff uncertainty Dominic Lapointe, director of macro strategy at Manulife Investment Management, said the impact of potential tariffs is not yet reflected in provincial debt spreads but could soon exacerbate financial challenges. Analysts including Canadian Imperial Bank of Commerce expect that even a 20 per cent tariff could widen provincial spreads on the 10-year Treasury note by as much as 12 basis points. With provinces expected to borrow about $135 billion in fiscal 2025, the additional borrowing costs could translate into about $162 million in additional interest per year. Ontario, Canada's largest province, recently sold C$750 million in bonds, a 60 basis point spread over the government's benchmark. This highlights investor…
World Bank warns of proposed global economic impact
The World Bank has issued a warning report on the impact of proposed U.S. tariffs, suggesting global economic growth could be hampered if countries retaliate with tariffs of their own. According to Reuters, the imposition of a comprehensive 10% tariff may further reduce global economic growth in 2025 by 0.3 percentage points from the expected 2.7%. In addition, potential retaliation could reduce the U.S. economic growth forecast for 2025 by 0.9%, or 2.3%. Also read: World Bank warns it could take more than a century to end poverty in half the world The World Bank's Global Economic Prospects report highlights that the global economic outlook is essentially stagnant, with growth rates of 2.7% in 2025 and 2026, the same as in 2024. Additionally, IndexBox data shows a significant increase in global trade restrictions, now five times greater between 2010 and 2019. Combined with the fact that foreign direct investment in developing economies has halved since the early 2000s, it paints…
U.S. and Chinese tariffs weigh on copper prices
As 2025 approaches, copper prices are expected to face significant challenges as additional U.S. trade tariffs imposed by the Trump administration and uncertainty about the Chinese economy severely impact consumption and price expectations. Citigroup said it expects copper prices to average US$8,750 per ton in 2025, down significantly from its previous forecast of US$10,250 per ton. Analysts pointed to restrictive monetary conditions in advanced economies and reduced policy support for electric vehicles as factors that have delayed the recovery of global manufacturing activity until after 2025. Also read: The best copper import markets in the world The London Metal Exchange reported that copper in Shanghai was trading at $9,100.50 a ton, down 20% from a record high in May, due to lower demand from China and a stronger dollar. Despite the potential for fiscal stimulus from Asia's largest economy, President-elect Donald Trump's intention to impose a 60% tariff on imports from China and impose additional tariffs on goods from other…
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