CANADA: Leftist Chow Secures Toronto Mayoralty, Promises Tax Hikes
Left-wing candidate Olivia Chow has secured the mayoralty of Canada's most populous city and financial centre, Toronto, following the 26 June by-election. Chow, a former MP for the left-wing New Democratic Party (NDP) won 37.2% of the vote compared to 32.5% for former deputy mayor Ana Bailão on 32.5%. Usually a mayoral contest would not be of market interest, but the oversized impact that Toronto has on Canada's fiscal outlook and financial system means the policies of its municipal leader can have an impact outside the city limits.
- The Globe and Mail highlights a potential showdown between Chow and the federal gov't, "The city is short CAD1.4-billion for last year and this year, and is seeking provincial and federal support that has not been forthcoming. The city is also facing a shortfall of nearly CAD50-billion over the next decade for its operating and capital expenses."
- In response to the budget shortfall, Chow has proposed an increase in Toronto's property taxes, vacant home taxes, and land transfer tax on +CAD3mn homes.
- While the election was won on resolutely local issues around housing and public safety, given the strong prospect of a snap election in Canada before the end of the current parliamentary term in 2025, Chow's win will garner some wider political attention.
- Metropolitan Toronto's ridings remain strongholds for PM Justin Trudeau's centre-left Liberals. However, a win for the former NDP MP Chow could give the leftist party a greater platform in the city to challenge Liberal incumbents.
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US: Debt Ceiling Deal Has Been Reached
NY Times reported negotiators reached a deal "in principle to raise the debt limit for two years while cutting and capping some government spending over the same period, a breakthrough after a marathon set of crisis talks that has brought the nation within days of its first default in history, three people familiar with the agreement said."
JGB TECHS: (M3) Corrects Lower
- RES 3: 151.26 - High Mar 3 2022
- RES 2: 149.75/150.81 - High Nov 11 / High Aug 5 2022
- RES 1: 149.53 High Mar 22
- PRICE: 148.53 @ 16:25 BST May 26
- SUP 1: 147.31/27 - 50-day EMA / Low Apr 18
- SUP 2: 145.80/144.73 - Low Mar 13 / Low Feb 13
- SUP 3: 144.15 - Low Jan 13
JGBs slid sharply Thursday, as hawkish Ueda comments prompted a correction. The bounce Friday helped stall any more protracted pullback, although the gap with next resistance at 149.17 remains. The strong recovery from 147.27, the Apr 18 low confirms the corrective nature of the recent pullback, keeping medium-term attention on 149.53, the Mar 22 high and the bull trigger. A break of this level would confirm a resumption of the uptrend. To the downside, the 50-dma provides support at 147.31, just above the Apr 18 low.
MNI: TREASURY GENERAL ACCOUNT $38.8B MAY 25 VS $49.5B PREV DAY
- MNI: TREASURY GENERAL ACCOUNT $38.8B MAY 25 VS $49.5B PREV DAY
