The Daily Chase: Inflation eases once more

Here are five things you need to know this morning.

Canadian inflation continues to cool: Canada’s annual inflation rate cooled from 2.9 per cent in March to 2.7 per cent in April. Even better news, according to Statistics Canada’s data release this morning, is that the Bank of Canada’s two core measures of inflation slowed during the month to an average yearly pace of 2.75 per cent. That’s down from 3.05 per cent a month earlier, and below the 2.8 per cent expected. It’s the fourth month in a row of easing on that metric, Bloomberg reports, and a cautiously optimistic sign for anyone hoping for a rate cut any time soon. Tuesday’s inflation report is the last such data print before the central bank meets in two weeks to decide on its next interest rate policy. Yesterday, the swaps market was about 40 per cent confident a cut will come at that meeting. Today, those odds are up to more than 60 per cent.

Ethereum price surges on ETF approval speculation: Ethereum is having its biggest one-day gain since 2022 as speculation mounts that U.S. regulatory authorities are getting ready to approve a number of ETFs that track the spot price of the world’s second-biggest cryptocurrency. Ethereum’s price is up by 14 per cent this morning, above US$3,770, following a report that the U.S. Securities & Exchange commission recently contacted at least one stock exchange and at least one potential ETF issuer for an update related to some of their regulatory filings. Bloomberg, citing an anonymous source familiar with the matter, reports this morning that the move is a strong shift toward approval of the products. How likely is it? Bloomberg Intelligence cryptocurrency analyst Eric Balchunas has upped his odds of an approval from 25 per cent to 75 per cent this morning, and the market is responding accordingly. We saw a similar surge in the price of Bitcoin earlier this year when the SEC approved about a dozen ETF products tied to the cryptocurrency. A decision on at least one potential ETF is due as soon as Thursday so we won’t have to wait long to see something concrete.

Tesla shareholders balk at Elon Musk’s pay package: A coalition of Tesla shareholders are urging other shareholders to reject the proposed US$56 billion pay package the company is set to award Elon Musk with the board’s approval. Musk’s pay package, first approved in 2018, sees the company’s CEO and icon earn an eye-popping amount of money even by megacap standards, as long as the company hits certain financial targets. To Musk’s credit, the company did exactly that, taking the company’s share price from below $20 a share in 2018 to as high as almost $400 by late 2021. But the company has lost about half of those gains since then, which is why a growing number of shareholders are questioning why Musk should stay in a league of his own in terms of compensation. Musk’s decision to buy Twitter, now called X, “played a material role in Tesla’s underperformance” in recent year and if keeping Musk focused on Tesla over outside interest was the idea behind the pack package, it has been “an abysmal failure,” the letter reads. Many of the shareholders raising a stink now were already doing so more than a year ago, reaching out to company chair Robyn Denholm to no avail. Among other requests, the signatories are seeking a shakeup of the board, too, including the ouster of Musk’s brother Kimbal Musk.