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☆ Bank of Canada raises rates, says it is likely to pause for now
▼ + stars: | 2023-01-25 | by ( ) www.reuters.com time to read: +1 min

OTTAWA, Jan 25 (Reuters) - The Bank of Canada on Wednesday hiked its benchmark overnight interest rate by 25 basis points to 4.5%, its highest level in 15 years, and said it would likely pause to measure the cumulative effect of previous increases. Inflation will fall to about 3% around the middle of this year, and reach target next year. If the economy evolves as forecast, "Governing Council expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases," according to a statement. "Governing Council is prepared to increase the policy rate further if needed to return inflation to the 2% target." (Reporting by Steve Scherer and David Ljunggren)((Reuters Ottawa bureau, +1 647 480 7921; david.ljunggren@tr.com))Keywords: CANADA CENBANK/RATESOur Standards: The Thomson Reuters Trust Principles.

☆ Toronto market ends slightly down as Magna slides
▼ + stars: | 2023-01-24 | by ( Fergal Smith | ) www.reuters.com time to read: +2 min

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended down 2.03 points at 20,629.55, after posting on Monday its highest closing level in more than seven months. The U.S. benchmark index S&P 500 also ended slightly lower. "The issue for 2023 is going to be watching the lagged effects of the interest rate hikes that occurred last year," said Brian Madden, chief investment officer at First Avenue Investment Counsel in Toronto. Investors worry that aggressive interest rate hikes could trigger a recession, with data on Tuesday showing that U.S. business activity contracted for the seventh consecutive month in January. The Bank of Canada will hike its key interest rate by a quarter of a percentage point to 4.5% on Wednesday and then hit pause on its tightening campaign, a Reuters poll of economists showed.

☆ Rogers' bid for Shaw gets boost after court rejects antitrust effort to block deal
▼ + stars: | 2023-01-24 | by ( Maiya Keidan | ) www.reuters.com time to read: +3 min

TORONTO, Jan 24 (Reuters) - A Canadian court on Tuesday dismissed the competition bureau's effort to block Rogers Communications Inc's (RCIb.TO) C$20 billion ($14.9 billion) bid to buy Shaw Communications Inc (SJRb.TO), in a boost to the companies' efforts to close a deal struck nearly two years ago. Shaw and Rogers intend to finalize the deal by Jan. 31, though the deadline can be extended in agreement with Quebecor. Judges spent the morning grilling competition bureau counsel on their case against the transaction and delivered their verdict in the afternoon without hearing from Rogers and Shaw. The bureau previously failed to convince the competition tribunal, a quasi-court that handles merger disputes, that the deal is harmful for Canadian consumers. Canada's Competition bureau, Rogers Communications and Shaw Communications did not immediately respond to a Reuters request for comment.

☆ Canada judge calls into question regulator's argument to block Rogers-Shaw deal
▼ + stars: | 2023-01-24 | by ( Maiya Keidan | ) www.reuters.com time to read: +4 min

TORONTO, Jan 24 (Reuters) - A Canada federal judge called into question the competition bureau's argument to block Rogers Communications Inc's (RCIb.TO) C$20 billion ($14.9 billion) bid for Shaw Communications Inc (SJRb.TO) as the court hearing kicked off on Tuesday. But the bureau failed to convince the competition tribunal, a quasi court that handles merger disputes, that the deal is harmful for Canadian consumers. "According to the tribunal, this was not a particularly close case," the judge told the court on Tuesday. "I think the appeal is going to be dismissed," said Michael Osborne, a competition lawyer at law firm Cozen O'Connor. A spokesperson for the competition bureau declined to comment while the matter was before the court.

☆ Rogers-Shaw, Canada regulator to duke it out in federal court over C$20 bln bid
▼ + stars: | 2023-01-24 | by ( ) www.reuters.com time to read: +3 min

But the bureau failed to convince the competition tribunal, a quasi court that handles merger disputes, that the deal is harmful for Canadian consumers. Rogers offered to sell Shaw's Freedom Mobile unit to Quebecor's (QBRb.TO) Videotron for C$2.85 billion to address anti-competition concerns, but the competition bureau argued that a merged Rogers-Shaw would not have a viable competitor in Quebecor. "I think the appeal is going to be dismissed," said Michael Osborne, a competition lawyer at law firm Cozen O'Connor. For that reason, I think the Court of Appeal will make sure to do it in time for the parties to close." A spokesperson for the competition bureau declined to comment while the matter was before the court.

☆ Energy, consumer weigh on Toronto stocks ahead of BoC decision
▼ + stars: | 2023-01-24 | by ( Shashwat Chauhan | ) www.reuters.com time to read: +2 min

Jan 24 (Reuters) - Canada's main stock index fell on Tuesday, as energy and consumer discretionary stocks dragged the index lower ahead of the Bank of Canada's interest rate decision on Wednesday, while data showed U.S. business activity contracted. ET (1522 GMT), the Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) was down 68.95 points, or 0.33%, at 20,562.63. Commodity-linked stocks took a dive, with both energy (.SPTTEN) and materials (.GSPTTMT) down 0.7% and 0.6%, respectively, as commodity prices slipped. Looking ahead, another interest rate hike by the Bank of Canada (BoC) is looming large, with traders leaning towards a 25-basis-point hike on Wednesday. The BoC had hiked its overnight lending rate all through 2022, with the current rate sitting at an over 16-year high.

The euro reached as high as $1.0927 , breaking the recent peak of $1.08875, to trade at its highest level since April last year. The single currency was aided by European Central Bank (ECB) governing council members Klaas Knot and Peter Kazimir, who both advocated for two more 50 basis point hikes at meetings in February and March. A Reuters survey of analysts also favoured hikes of 50 basis points at the next two meetings and an eventual rate peak of 3.25%, from the current rate of 2%. Investors also have around 50 basis points of U.S. rate cuts priced in for the second half of the year, reflecting softer data on inflation, consumer spending and housing. The pound rose as high as $1.24475 , its highest in seven months, before turning 0.3% lower to $1.2355.

The euro reached as high as $1.0927 , breaking the recent peak of $1.08875, to trade at its highest level since April last year. It was aided by European Central Bank (ECB) governing council member Klaas Knot, who said interest rates would rise by 50 basis points in both February and March and continue climbing in the months after. A Reuters survey of analysts also favoured a hike of 50 basis points in March and an eventual top of 3.25% from the current rate of 2%. "Layered on top of that, it looks as if the ECB are going to carry on hiking interest rates fairly aggressively," Foley added. Investors also have around 50 basis points of U.S. rate cuts priced in for the second half of the year, reflecting softer data on inflation, consumer spending and housing.

☆ Euro clears 9-month peak as ECB hawks let fly
▼ + stars: | 2023-01-23 | by ( Wayne Cole | ) www.reuters.com time to read: +3 min

The euro reached as far as $1.0903 , breaking the recent peak of $1.08875 and opening the way to a spike top from last April at $1.0936. It was aided by European Central Bank (ECB) governing council member Klaas Knot, who said interest rates would rise by 50 basis points in both February and March and continue climbing in the months after. A Reuters survey of analysts also favoured a hike of 50 basis points in March and an eventual top of 3.25%. Investors also have around 50 basis points of U.S. rate cuts priced in for the second half of the year, reflecting softer data on inflation, consumer spending and housing. read moreAny hint the replacement is less dovish than current governor Haruhiko Kuroda could see the yen climb anew.

☆ Euro nears nine-month peak as ECB hawks let fly
▼ + stars: | 2023-01-23 | by ( Wayne Cole | ) www.reuters.com time to read: +3 min

The euro crept ahead to $1.0870 and nearer its recent nine-month peak of $1.08875. It was aided by European Central Bank (ECB) governing council member Klaas Knot, who said interest rates would rise by 50 basis points in both February and March and continue climbing in the months after. Much the same argument goes for sterling, with markets wagering the Bank of England will hike by half a point to 4.0% at its policy meeting next week. Analysts assume the BOJ will stand the line until at least the next policy meeting in March, though one hurdle will be the expected naming of a new BOJ governor in February. For now, the dollar was holding at 129.40 yen , following last week's wild gyrations between 127.22 and 131.58.

☆ Morning bid: Who let the hawks out?
▼ + stars: | 2023-01-23 | by ( ) www.reuters.com time to read: +3 min

It's a good opportunity for policy hawks at the European Central Bank to get their message across. The ECB is likely to raise interest rates by 50 basis points in February and March and will continue to increase rates in the months after, ECB governing council member Klaas Knot said at the weekend. ECB chief Christine Lagarde meanwhile has reiterated the central bank will keep raising rates at a brisk pace to bring inflation down to its 2% target. Euro at nine-month highs vs dollarThe Bank of Canada, meanwhile, is expected to hike interest rates by 25 bps on Wednesday. Trade in U.S. stock futures suggested a flat open for Wall Street , , although the signals from other major stock markets boded well for U.S. trading later on.

☆ 'P.R. job' or antidote to 'groupthink'? Bank of Canada to offer policy-meeting minutes
▼ + stars: | 2023-01-22 | by ( Steve Scherer | ) www.reuters.com time to read: +4 min

Annual inflation shot to 8.1% in June, the highest in 39 years and four times the Bank of Canada's 2% target. On the recommendation of the International Monetary Fund, the BoC in September said it would release minutes to improve transparency,Other central banks including the U.S. Federal Reserve, the Bank of England and the European Central Bank already provide some form of record of their meetings. "The big enemy for policymakers and investors is groupthink," said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. JOB'Other market-watchers say releasing minutes is more an exercise in public relations than an effort to boost transparency. Reuters GraphicsReuters GraphicsReporting by Steve Scherer, additional reporting by Fergal Smith, editing by Deepa BabingtonOur Standards: The Thomson Reuters Trust Principles.

☆ BoC to raise rates by 25 bps to peak of 4.50% on Jan. 25
▼ + stars: | 2023-01-20 | by ( Swathi Nair | ) www.reuters.com time to read: +3 min

A strong majority of 90% of economists, 26 of 29, expected a quarter-point rise on Jan. 25 to 4.50%, according to a Jan. 17-20 Reuters poll, in line with interest rate futures. The BoC has hiked rates by a cumulative 400 basis points since March 2022. "Rather than raise interest rates much further, the bigger risk to our policy rate forecasts is that the Bank will probably keep rates high for longer than we currently assume." The BoC is then expected to keep its overnight rate on hold at 4.50% for the remainder of the year, poll medians showed. That is in line with a recent BoC survey which showed most firms now think a recession is likely.

☆ Strong Canada retail sales forecast adds fodder to rate hike argument
▼ + stars: | 2023-01-20 | by ( Ismail Shakil | ) www.reuters.com time to read: +1 min

The November monthly sales decline was less than the 0.5% drop analysts expected. By volume, retail sales were down 0.4% in November from October, Statistics Canada said. "Ongoing economic momentum will likely prompt the Bank of Canada to raise rates another 25bps next week," Royce Mendes, head of macro strategy at Desjardins Group, said in a note. Money markets see a roughly 70% chance of a quarter-point hike by the Bank of Canada next week. Reporting by Ismail Shakil and Dale Smith in Ottawa Editing by Frances KerryOur Standards: The Thomson Reuters Trust Principles.

OTTAWA, Jan 17 (Reuters) - Canada's annual inflation rate eased more than expected in December as gas prices came down but core measures remained little changed from the previous month, Statistics Canada said on Tuesday, making another interest rate hike this month likely. Inflation slowed to 6.3% in December from 6.8% in November, a notch lower than the 6.4% median forecast of analysts. Prices fell 0.6% from the previous month, again showing price pressures easing more than analysts' forecast for a 0.5% decline. Most analysts agreed the Bank of Canada would hike rates by a quarter of a percentage point on Jan. 25, when it next meets. Money markets see a 77% chance of a quarter-point hike by the Bank of Canada next week, up from 70% before the data.

Some two-thirds of firms expect a recession over the next 12 months, with 90% of those expecting it to be mild. Several businesses said rising interest rates were slowing household demand and housing market activity. The survey showed that 84% of firms expect inflation to remain above 3% for the next two years, up from 77% in the third quarter. Canada's annual inflation rate eased to 6.8% in November as gasoline prices rose more slowly, still well above the central bank's 2% target, data showed last month. Almost 64% of consumers said they would reduce spending and save more to cope with inflation and rising interest rates.

☆ Is Canadian inflation on a sustainable path to 2%? Essentials offer clues
▼ + stars: | 2023-01-15 | by ( Fergal Smith | ) www.reuters.com time to read: +3 min

Canada's consumer price index report for December, due on Tuesday, is expected to show headline inflation cooling to 6.3%, its lowest annual rate since last February, from 6.8% in November. If inflation expectations rise, it could push up wage demands, particularly in a tight labor market, leading to further price pressures. "One eye is on wage growth, which is strong but not too bad at the moment, but then this other idea (which is) on the price inflation for essentials that could keep wage demands high, as it affects inflation expectations." "If inflation slows and wage growth doesn't, then wages become more of a tailwind for inflation going forward. "What we really need to see in December is weaker price growth across the board."

☆ Canada appoints First Nations member to Bank of Canada board
▼ + stars: | 2023-01-12 | by ( ) www.reuters.com time to read: +1 min

OTTAWA, Jan 12 (Reuters) - The Canadian government filled three Bank of Canada board vacancies on Thursday with finance veterans including Ernie Daniels, likely the first First Nations member on the central bank's board, a bank spokesperson said. The Bank of Canada's board selects its governor and provides general oversight of the management and administration of the institution. Daniels and the other two appointees - David Dominy and Shelley Williams - "bring many years of accounting, capital markets, and financial management from across industries and sectors," Canada's finance ministry said in a statement. Daniels, who is from the Salt River First Nation in Canada's Northwest Territories, has over 35 years of senior financial management experience and has been chief executive of First Nations Finance Authority, a financial non-profit, since 2012. "To the best of our knowledge" Daniels is the first board member to hail from a First Nation in the bank's almost 90-year history, a spokesperson said.

Jan 12 (Reuters) - City National Bank, a unit of Royal Bank of Canada (RY.TO), agreed to commit more than $31 million to boost lending to Black and Hispanic home buyers in the Los Angeles area, in the U.S. Department of Justice's largest settlement over illegal redlining. The Justice Department accused City National of violating the federal Fair Housing Act by having "avoided" serving majority-Black and majority-Hispanic neighborhoods in the Los Angeles area between 2017 and 2020. The bank will also improve training, spend at least $1.75 million on advertising, community programs and financial education, and set up a fair lending oversight committee. Garland said the Justice Department is trying to vigorously enforce fair lending laws and ensure that lenders "provide equal opportunity for every American to obtain credit. City National, with $95.3 billion of assets, denied wrongdoing, but said it settled to avoid prolonged litigation.

Companies Royal Bank of Canada FollowJan 12 (Reuters) - The United States on Thursday filed a lawsuit against City National Bank, a unit of Royal Bank of Canada (RY.TO), under the federal Fair Housing Act. The lawsuit was filed with the federal court in Los Angeles, online court records show. RBC and City National had no immediate comment. A spokesman for the U.S. attorney's office in Los Angeles did not immediately respond to a request for comment. Reporting by Jonathan Stempel in New YorkOur Standards: The Thomson Reuters Trust Principles.

REUTERS/Eva Plevier/File PhotoWINNIPEG, Manitoba, Jan 11 (Reuters) - Netherlands-based Rabobank NA (RABOVR.UL) is aiming to grab 10-15% of the Canadian farm lending market within 15 years, as it aims to shake up a sector dominated by government and domestic banks, its new Canadian agricultural head told Reuters on Wednesday. It took Rabobank a decade before deciding to expand into Canadian farm lending, taking a methodical approach, Lieverse said. Rabobank expects Canadian farm lending to be profitable from the start and plans to announce hiring plans shortly, she said. Rabobank did not release its estimate of the value of the Canadian farm lending market, but government agency Statistics Canada pegged 2021 farm debt at a record-high C$129 billion ($96.1 billion), with chartered banks accounting for 37%. Farm Credit Canada, owned by the Canadian government, is the biggest agricultural lender, controlling a market share of about one-third, Lieverse said.

☆ Morning bid: Obstacle course ahead
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +6 min

San Francisco Fed President Mary Daly and Atlanta Fed chief Raphael Bostic said they expect Fed rates - now at 4.25% to 4.5% - will need to rise to a 5% to 5.25% range to sap inflation. The other big market obstacle of the week is the onset of the U.S. corporate earnings season. Four American banking giants - JPMorgan (JPM.N), Bank of America (BAC.N), Citigroup (C.N) and Wells Fargo (WFC.N) - report earnings on Friday. Diaried events and data releases that may provide direction to U.S. and world markets later on Tuesday:* U.S. Dec NFIB small business survey. * U.S. Federal Reserve Chair Jerome Powell, Bank of Japan governor Haruhiko Kuroda, Bank of England Governor Andrew Bailey, Bank of Canada governor Tiff Macklem and European Central Bank board member Isabel Schnabel all speak at Swedish central bank event.

☆ Canadian dollar to rebound in 2023 if economic uncertainty clears
▼ + stars: | 2023-01-06 | by ( Fergal Smith | ) www.reuters.com time to read: +2 min

The loonie will edge 0.6% higher to 1.35 per U.S. dollar, or 74.07 U.S. cents, in three months, according to the median forecast of currency analysts. The Bank of Canada, along with the Federal Reserve and most other major central banks, has raised interest rates at a rapid pace to tackle soaring inflation. Another potential tailwind for the loonie would be the end of the U.S. dollar's in global currency markets since 2021. A "weaker dollar story" could emerge if the Fed moves to end quantitative tightening (QT), said Bipan Rai, global head of FX strategy at CIBC Capital Markets. QT is a process central banks use to shrink the size of their balance sheets.

☆ Canada posts hefty job gains, raising chances of another rate hike
▼ + stars: | 2023-01-06 | by ( Ismail Shakil | ) www.reuters.com time to read: +2 min

The economy gained a net 104,000 jobs in December, far exceeding analysts' forecasts, while the jobless rate decreased to 5% from 5.1% in November, Statistics Canada data showed. Analysts surveyed by Reuters had forecast a net gain of 8,000 jobs and for the unemployment rate to edge up to 5.2%. Money markets now see a 75% chance of a 25-bp rate increase in January, up from roughly 60% before the data. Employment in the goods-producing sector rose by a net 22,200, mainly in construction. Employees in the private sector rose by 112,000 in December, the largest increase since February, while public sector and self-employed workers were both little changed, Statscan said.

☆ Canada is banning some foreigners from buying property after home prices surged
▼ + stars: | 2023-01-01 | by ( Chris Isidore | ) edition.cnn.com time to read: +3 min

New York CNN —Canada in 2023 is closing its doors to foreign investors who want to purchase homes. A new Canadian law took effect January 1 that essentially bans foreign buyers from buying residential properties as investments for two years. “The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors,” said the campaign website of Prime Minister Justin Trudeau’s party this past year. “Canadians purchase vacation and residential properties in many countries, but particularly in the United States,” said the group. “If Canada places a ban on Americans owning property in Canada, we should expect them to respond in kind.”

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