Canada’s cannabis gets higherBy Vincent-Frédéric Mivelaz
As Canada’s legalization of cannabis approaches, the big actors are moving their pawns. Over 100 deals were made last year, and majors are still looking for synergies with smaller players that are expanding organically. Aurora Cannabis, one of the largest actor in the production and medical, cumulated 15 acquisitions in the past two years. Looking for vertical integration and horizontal diversification, it is focusing on a juicy market of 800 million people worldwide. So yesterday’s $785-million friendly takeover of Cannimed Therapeutics, the largest acquisition ever in the cannabis industry, is a milestone. As the cannabis industry broadens and legislators become more flexible toward recreational and medical use, the road is open for further growth.
USD consolidates on Fed holdBy Arnaud Masset
As expected, the US Federal Reserve held rates unchanged on Wednesday and made minor adjustments to its policy. Amid release of the latter, the US dollar tumbled, suggesting that investors were expecting more hawkishness. But USD quickly bounced back to its pre-publication level. EUR/USD jumped to 1.2026 before easing to 1.1938 in late US trading. The single currency is stabilising around 1.20: a key technical at it corresponds to the 200-day moving average as well as a strong psychological threshold. A break to the downside would trigger further dollar strength. However, the buck has been overbought recently and a stabilisation, if not a slight weakening, would seem reasonable.
Latest data released by ADP say private employment remained strong in April with 204 thousand jobs added. This is slightly above the median forecast, but given that March’s figures were downwardly revised, overall sentiment was neutral. Nonfarm payrolls, released tomorrow, are expected at 192 thousand versus 103 thousand in March. Unemployment is expected at 4%, and median forecasts for wage growth stand at 2.7%. For the last weeks, the market likes the dollar, so an upside surprise in jobs report could drive it higher towards the 1.15-1.1736 area.
Italian GDP climbs in Q1By Vincent-Frédéric Mivelaz
Whereas the EU economy is losing steam in Q1, Italy is showing the way. Its economic growth reached 0.30% during first Q1 (1.40% year on year), in line with Q4 2017 and maintaining constant pace since Q3 2013. In the midst of government coalition talks, which is slowly forming a League Party and Five Star team, stronger economic growth is expected, as GDP highs from 2011 could be reachable (above 2%).