First Look With Surveillance: UK Inflation, US Housing
U.S. equity markets are poised for a muted open as investors await U.S. Federal Reserve chair Jay Powell’s testimony before congress. You’re looking at a generally flat showing on the futures of all three major indices ahead of Powell, who begins his two day testimony at about 10 a.m. EDT today. We’re looking for a number of things from Powell, most notably how he underscores the Fed’s resolve to tamp down inflation with another 50 basis points worth of hikes by year end, as indicated in the most recent dot plot from the central bank.
SPEAKING OF CENTRAL BANKS…
…We’re poised to get a few more details on what led to the Bank of Canada’s somewhat surprising June 7 interest rate increase when the BoC releases its summary of deliberations of the meeting later today. Now, these aren’t quite like the FOMC minutes, and they don’t get into the nitty-gritty of what on around the table, but every little bit of information about how Macklem & Co. are viewing the evolution of risks when it comes to getting inflation back to the two per cent target are welcome.
ALLIED PROPERTIES SELLS DATA CENTRES FOR $1.35B
Allied Properties has found a buyer for its urban data centre portfolio, nearly six months after putting those assets on the auction block. The company is selling those holdings to Japan’s KDDI Corp for $1.35 billion, pretty much in line with what it said the unit was worth back in January. Allied is earmarking about $1 billion worth of the proceeds to pay down debt, with the remainder helping to fund upgrades to existing holdings and its development plans. Allied also says that as a result of the sale (and the subsequent increase in taxable income), it plans to pay an as-yet unspecified special distribution to unit holders at year-end.
OTHER NOTABLE STORIES
- We’ve got a significant rift forming in the accounting industry – the main accounting bodies in Ontario and Quebec have announced plans to exit the national CPA association, a withdrawal that will take about 18 months.
- Shares of FedEx are drifting lower in the premarket – down the better part of three per cent – after the company delivered a weaker-than-expected profit forecast due to a slowdown in package demand.
- We’ve got another sign of just how sticky price pressures are proving to be out of England, after inflation came in at 8.7 per cent in May – the same as the month before, and well above the consensus estimate of 8.4 per cent.
- Notable data: Retail Sales, New Housing Price Index
- Notable earnings: AGF Management, Algoma Steel Group, KB Home, Winnebago Industries
- -100: AGF conference call to discuss earnings
- 1330: Bank of Canada Summary of Deliberations for the June 7 policy decision