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Canada to remain in triple-A club's shrinking pool: Citigroup

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Canada to hold onto triple-A Strategists at Citigroup Inc. expect the number of triple-A-rated-countries to shrink over the next few years, but that Canada will hold onto its cherished designation.

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Standard & Poor's and Moody's Investors Service will further downgrade several euro zone nations, and put France up for review of its triple-A rating, Michael Saunders and Mark Schofield said in a report.

And they see a "shrinking pool" of triple-A-rated countries over the next two to three years:

"Only Canada, Germany, the U.K., Switzerland, Sweden, Denmark, Norway and the Australasian economies will probably retain this status among major economies. The U.K. has the weakest fiscal outlook of these triple-A countries, and we expect that S&P will put the U.K. on negative ratings outlook over the next two to three years. It would not be a great surprise if the U.K. was also downgraded one notch at some stage."

In their separate report on Canada, economist Dana Peterson and strategist Brett Rose cite the fiscal and political stability, and believe that the ratings agencies "will likely retain Canada's triple-A status in both the near and long term."

Citigroup noted the buget plans for the federal and provincial governments, and the better fiscal outlook at the federal level, putting Canada "well ahead of schedule" on its G20 pledge to cut the deficit by half by next year and cut overall debt-to-GDP ratios by 2016.

"Much of the savings are anticipated to come from restrained government program spending as well as moderately improved Canadian economic prospects," Citigroup said of the federal and provincial picture.

"These actions may place additional drag on real output this year, but should be favourable for the Canadian economy over the longer term."

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Bets on Carney Mark Carney says he's not in the race to replace Mervyn King as governor of the Bank of England, but the bookies don't necessarily see it that way.

The Bank of Canada governor said yesterday that a Financial Times report that he was informally approached about the job was inaccurate, and that he's going to focus on his current two positions as central bank chief and head of the global Financial Stability Board.

Still, the website of Paddy Power, an Irish bookmaker, was giving Mr. Carney 10-1 odds this morning of taking over from Mr. King.

Banks beat forecasts Bank of America Corp. and Morgan Stanley both beat analysts estimates on first-quarter results today, though their earnings slipped.

Bank of America earned $653-million or 3 cents a share, compared to $2.1-billion or 17 cents a year earlier, though the latest numbers were hit by hefty charges. Revenue sliped 17 per cent.

Morgan Stanley, in turn, swung to a loss of $119-million or 6 cents a share, from a profit of $736-million or 50 cents a year earlier, also taking an accounting hit.

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Garda slips You've got to hand it to Garda World Security Corp.

In annual earnings report today, the Canadian security firm highlighted its "flawless integration of new business start-ups in U.S. Cash Logistics," integration of an acquisition, new markets in southern Iraq and Afghanistan, the relocation of offices in Dubai and Florida, the "ability of our people and platforms to generate solid profitable results," a "major contract win" for 14 Canadian airports, and a second half that was "nothing short of spectacular."

And a slide in profit to $21.6-million from $28.6-million. (Adjusted profit slipped to $23-million because of higher depreciation and finance costs."

Jobless claims fall The number of Canadians collecting regular jobless benefits declined in February, notably in the provinces of Alberta, Saskatchewan and Quebec.

Having climbed by 2.3% per cent in January, the number declined by 1.2 per cent two months ago to almost 553,000, Statistics Canada said today.

The number of initial and renewal claims also fell, by 2.5 per cent, with Quebec alone accounting for the bulk of the decrease on that measure.

On an annual basis, the agency said, most of Canada's major cities are seeing a decline in those receiving regular benefits under the Employment Insurance system.

In the United States, there are still signs of extreme trouble on the jobs front. Initial claims for benefits fell last week by 2,000, while the previous week's numbers were revised higher. A better measure is the four-week moving average, which rose by more than 5,000 to the highest since late January.

Silver not likely to repeat 2011 Record levels of silver investment demand, focused mostly on the physical metal, coins and bars, drove average prices for the metal to record highs last year, although a repeat performance is not likely in 2012, The Globe and Mail's Pav Jordan reports today.

According to the World Silver Survey 2012, average price for the metal that is best known for its use in jewellery and coins was $35.12 (U.S.) per ounce last year.

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About the Author
Report on Business News Editor

Michael Babad is a Report on Business editor and co-author of three business books. He has been with Report on Business for several years, and has also been a reporter and editor at The Toronto Star, The Financial Post and United Press International. His articles have appeared in major newspapers around the world. More

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