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Canada CPI Rose By 2.9% in May

Consumer prices in Canada took an unexpected turn and rose in May, data from Statistics Canada showed on Tuesday, reversing a trend of almost consistent cooling since the start of the year. This development has forced markets to trim hopes of a rate cut by the Bank of Canada (BoC) in July to below 50%.

The Consumer Price Index (CPI) rose 2.9% year-over-year in May, up from a 2.7% increase in April. This acceleration was largely driven by higher prices for services, which saw a 4.6% rise compared to a 4.2% increase in April.

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What’s going on?

• WestJet Faces New Strike Threat as Union Rejects Offer Again (theDeepDive)

• Supreme Court Backs White House on Social Media Post Removal (Bloomberg)

• Russia Begins ‘Secret Trial’ of WSJ Reporter Accused of Stealing State Secrets (theDeepDive)

• YouTube in talks with record labels over AI music deal (FT)

• North Korean Hypersonic Missile Test Fails, Explodes Midair (theDeepDive)

• Trudeau to remain party leader as Liberals demand urgent changes after stunning by-election loss (Globe)

• Boeing Leaves Two Astronauts Stuck In Space (theDeepDive)

• Kenyan president withdraws tax hikes after nationwide protests kill 23 (CBC)

• Former Apple Employee’s Revelations On Hazardous Waste Violations Lead to Major EPA Investigation (theDeepDive)

• WikiLeaks founder Assange welcomed home in Australia a free man after US deal (Reuters)

What’s the latest?

• Canadian Disaster: Canadian Prime Minister Justin Trudeau has vowed to remain in office despite the ruling Liberal Party's loss of a historically secure seat in a special election in Toronto-St Paul's. This defeat, the first since 1988, signals a significant shift as the Conservatives gain ground in vote-rich Toronto, crucial for Trudeau's power base. Addressing the loss, Trudeau acknowledged the challenges and committed to working harder for Canadians. The next federal election is due by October 2025, with polls indicating a potential significant loss for the Liberals to the Conservatives. Analysts suggest that the Liberals may need new leadership to counter this trend, with possible candidates including former Bank of Canada governor Mark Carney and Public Safety Minister Dominic LeBlanc.

• Social Media: The U.S. Supreme Court ruled 6-3 to reject limits on how President Joe Biden's administration communicates with social media platforms about removing misinformation. This decision overturned a lower court's ruling that federal officials likely violated the First Amendment by encouraging the removal of certain posts.

• Lithium Transparency: Albemarle, the largest lithium producer globally, plans to hold more auctions for lithium to enhance price transparency and understanding in the market, according to Eric Norris, head of Albemarle's energy storage business. This initiative aims to clear up confusion around lithium pricing, which has been exacerbated by volatile pricing in China, affecting Western producers' shares. Albemarle auctioned some Australian lithium supplies in March and plans to expand this practice globally. The company intends to share auction data with pricing agencies to establish publicly available prices, supporting more accurate supply contracts with automakers and fostering hedging and financial contracts to reduce risk.

• U.S Housing: In May, U.S. new single-family home sales fell to a six-month low, impacted by rising mortgage rates, indicating a faltering housing market recovery. Sales dropped 11.3% to an annual rate of 619,000 units, the lowest since November, with April's figures revised up to 698,000 units. Economists had predicted a rate of 640,000 units. New home sales, a leading housing market indicator, can be volatile month-to-month and fell 16.5% year-on-year in May.

• Credit Card Fees: A U.S. judge has rejected a proposed $30 billion antitrust settlement involving Visa and Mastercard, which aimed to limit the fees they charge merchants for accepting their credit and debit cards. U.S. District Judge Margo Brodie denied preliminary approval for the settlement, stating she was unlikely to grant final approval. Many merchants and trade groups, such as the National Retail Federation, opposed the settlement, arguing it did not sufficiently reduce fees and left Visa and Mastercard with too much control over card transactions. The decision may force the companies to negotiate a more favorable deal for merchants or proceed to trial. Visa and Mastercard expressed disappointment with the ruling, while lawyers for the merchants seeking the settlement did not immediately comment.

Silver surges in 2024

The stock market and stuff

• Rivian Shares Surge as Volkswagen Announces $5 Billion Partnership (theDeepDive)

• Novo Nordisk makes impairment loss of $816 mln in Q2 (Reuters)

• First IPO in Eight Years Marks Uruguay’s Move to Deepen Markets (Bloomberg)

• Tesla Recalls Nearly 12,000 Cybertrucks Over Safety Concerns (theDeepDive)

In the juniors

• Eskay Mining and P2 Gold Terminate Merger Agreement Just Weeks After Announcement (theDeepDive)

• Taiga Motors CFO Eric Bussières to Depart, Firm’s Shares Jump (theDeepDive)

• Skeena Resources Secures $750 Million Financing, Funding Eskay Creek Project Into Production (theDeepDive)

FULL DISCLOSURE: Cytophage Technologies is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Cytophage Technologies. The author has been compensated to cover Cytophage Technologies on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.