These are stories Report on Business is following Tuesday, April 28, 2015.
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Loonie climbs
The loonie surged past the 83-cent mark today, buoyed by a shift in the outlook for the U.S. dollar, more stable oil prices and the more optimistic vibes from the Bank of Canada.
"It's a little bit stronger, which is the new motto," Bank of Nova Scotia chief currency strategist Camilla Sutton said of the Canadian dollar, which has been as high as 83.23 cents U.S. and as low as 82.53 cents today.
By late afternoon, it sat at 83.12 cents.
"After a brutal winter for the loonie, it's been a great spring – the currency is now up more than 6 per cent since the mid-March lows," said chief economist Douglas Porter of BMO Nesbitt Burns.
The Canadian dollar has been pushed up by "pretty stable" oil prices and a shift in sentiment for the U.S. currency "from very strong to very balanced," Ms. Sutton said.
On top of that is the feel-good feeling from Mr. Poloz, who painted a brighter picture for the Canadian economy last week and continued that theme today.
"Today's move higher in the Canadian dollar runs in line with an extension of the CAD-supportive themes that we've seen over the past two weeks," said senior currency strategist Greg Moore of RBC Dominion Securities.
"A rebound in oil prices toward the highest level in 2015, a less dovish message from the Bank of Canada, and a broad softening of the U.S. dollar have all worked in the Canadian dollar's favour," he added.
"There may be room for a small stretch higher from here, but in the coming quarters we expect these Canadian dollar gains unwind."
Speaking today to a parliamentary committee in Ottawa, Mr. Poloz held his generally cheery tone, maintaining that the impact of the oil shock was front-loaded and that, all things considered, other industries are faring well.
"While the impact of the oil price shock is happening faster than initially expected, it does not appear to be larger than we anticipated in January," he said in the text of his remarks to the Commons finance committee.
"Outside of the energy sector, other areas of the economy appear to be doing well," he added.
"The segments of non-energy exports that we expected to lead the recovery are doing so, and we expect this trend to be buttressed by stronger U.S. growth and the lower Canadian dollar."
And yet again, Mr. Poloz cited the threat from the consumer appetite for debt, though he stressed there was no bubble, as The Globe and Mail's David Parkinson reports.
"The level of indebtedness, as measured by the ratio of debt-to-disposable income, continues to edge higher," Mr. Poloz said as he and his senior deputy, Carolyn Wilkins, appeared before the committee.
"It is likely to rise further as the decline in gross national income caused by the drop in oil prices works its way through the system," he added.
"On the surface, lower interest rates would be expected to promote more borrowing, which would increase this vulnerability. However, in the near term, lower borrowing rates will actually mitigate this risk, by reducing payments for mortgage holders and giving us more economic growth and employment gains."
What's this mean going forward?
"The governor of the Bank of Canada spoke to the House of Commons this morning, and once again reiterated what he expects to be a sharp, but short-lived, blow to the economy from oil," said Nick Exarhos of CIBC World Markets.
"No real market moving news, but the governor's recent communications highlight an apparent comfort with current levels of monetary accommodation, which leans against another rate cut in the near- to medium-term," he added.
- David Parkinson: No risk of 'bubble,' Poloz says of bloated housing market
- Poloz's 'quixotic quest': JPMorgan calls BoC boss an Optimist-in-Chief
- David Parkinson: Poloz paints rosy picture of U.S. - and that's good for Canada
- 'Loonie makes like Lazarus': Why the Canadian dollar is on such a roll
- Inflated housing, deflated loonie: Tourist ads we'd love to see
- Poloz says Canada oil-shock effects to turn positive in second half
Shareholders say no
Barrick Gold Corp Chairman John Thornton said today that shareholders voted against his pay package and that the company would revise how he is compensated in the future.
"We have heard you loud and clear," he said at Barrick's annual meeting of shareholders, The Globe and Mail's Rachelle Younglai reports.
"We will take the feedback and refine the system as it relates to me."
He said preliminary votes cast showed that 75 per cent voted against and 25 per cent in favour.
Economic pace slows
Oops. At least if you're British Prime Minister David Cameron as next week's election draws ever closer.
Mr. Cameron is staring at a new report from the Office for National Statistics today that showed the country's recovery slowed in the first quarter of the year by more than projected, to a pace of just 0.3 per cent.
That's the slowest rate since late 2012.
"With next week's election fast approaching, the latest read on the economy isn't likely to curry any additional favour for PM Cameron's re-election campaign, but it might not be bad enough to bolster the opposition that much either," said BMO senior economist Carl Campus.
"It does, however, give the Bank of England a little more solace on the sidelines, and puts a 2015 rate hike further out of reach."
Results pour in
If you're getting whiplash from trying to track corporate earnings, join the club.
They're pouring in fast again this morning:
- Ford profit misses expectations, 2015 profit outlook affirmed
- Refining helps BP and Total weather oil price storm
- UPS profit rises, helped by price increases
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