These are stories Report on Business is following today. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Bank boosts outlook The Bank of Canada has a more optimistic outlook for Canada's economy this year, but that doesn't mean interest rates are going to rise before the summer months at the earliest.
The central bank boosted its forecast for economic growth as it held its benchmark rate steady at 1 per cent today, Globe and Mail economics writer Jeremy Torobin reports from Ottawa. But there was no signal that Governor Mark Carney and his colleagues plan to resume raising rates next month, particularly given the strength of the Canadian dollar .
"Its call for growth of 2.9 per cent in 2011 and 2.6 per cent in 2012 is close to our own forecast, and would still require a round of tightening ahead given that its hard to imagine holding to a 1-per-cent rate with the output gap closing," said chief economist Avery Shenfeld of CIBC World Markets.
"But the first hike still looks to be a July event, and will depend on the course of the Canadian dollar from here. Over all, a bit less hawkish than some might have expected."
Douglas Porter, deputy chief economist at BMO Nesbitt Burns, agreed there probably won't be a rate hike until July.
"There is no smoking gun here signalling a quick return to tightening," Mr. Porter said. "While the bank is less concerned about the global and U.S. risks, it is focused on the strong loonie. The needle is slowly moving to renewed rate hikes, but a hike is not yet imminent."
While the economic outlook may be brighter, the central bank now expects overall inflation could hit as high as 3 per cent this quarter. And here's something to note from the bank's accompanying statement: Wage growth is expected to stay "modest."
- Carney boosts forecast, holds rate
- What to watch for in Carney's monetary policy report
- Carney expected to issue muted quarterly report in midst of campaign
- Party leaders agree: Don't mess with the playoffs
Markets slump Global stock markets are in a down mood so far this morning, and oil prices are little changed.
Tokyo's benchmark Nikkei slipped 1.7 per cent, and Hong Kong's Hang Seng 1.4 per cent. In Europe, London's FTSE 100, Germany's DAX and the Paris CAC 40 were down by between 0.8 per cent and 1.1 per cent by about 6:30 a.m. ET. Dow Jones industrial average and S&P 500 futures also slipped.
Markets were awaiting a U.S. report on trade at 8:30 a.m.
"After last night's disappointing results from Alcoa, Wall Street remains very much on the back foot, and we're currently eyeing the Dow to open around 70 points lower," said IG Index sales trader Ben Critchley.
"Again, there's a general lack of directional information expected although the continuing retreat in oil prices could well provide some pockets of cheer. Expect the U.S. trade balance data to be under scrutiny too, but unless there are any surprises laid on the table in the next few hours it could prove to be a somewhat forgettable afternoon."
Trade surplus shrinks Canada's trade surplus unexpectedly shrank in February on lower exports of crude petroleum and cars, The Globe and Mail's Tavia Grant reports today.
The surplus narrowed to $33-million in the month from a revised $382-million, Statistics Canada said.
Both imports and exports fell. Exports tumbled 4.9 per cent after four straight months of growth while imports slid 4 per cent.
Lower volumes of both energy products and automotive products were the main reasons for the export decline, the agency said.
New-house prices rise New-house prices in Canada rose 0.4 per cent in February, following on January's 0.2-per-cent gain, Statistics Canada said today.
Prices rose the most in Regina, at 1.8 per cent, followed by Ontario's Kitchener-Waterloo region at 1.7 per cent, Charlottetown at 1.5 per cent, and Edmonton at 1.1 per cent, the agency said as it released its new housing price index.
Prices fell in Calgary, by 0.4 per cent, Windsor by 0.3 per cent, the Ottawa-Gatineau area by 0.2 per cent, and Saint John, Fredericton and Moncton by 0.1 per cent.
Year over year, Statistics Canada said, the index climbed 2.1 per cent in February, compared to 1.9 per cent in January.
UBS keen on Gildan UBS Securities Canada today boosted its 12-month price target on shares of Gildan Activewear Inc. in the wake of $350-million (U.S.) deal for sock maker Gold Toe Moretz Holdings Corp.
Although Gildan already has some socks in its portfolio, yesterday's deal offers access to new distribution channels, The Globe and Mail's Bertrand Marotte reports from Montreal.
UBS analyst Vishal Shreedhar boosted the target on Gildan stock to $40 from $37, saying the deal expands the company's market opporltunities in three ways:
- Gildan gets new retail relationships with wholesale clubs, specialty sporting goods chains, department stores, mass merchants and national chains given's Gold Toe's existing connections to outlets such as Sam's Club, Costco, Dick's Sporting Goods and Macy's.
- New brands and exclusive licences heighten opportunities beyond private labels.
- New third-party connections could expand the wholesale market beyond high-volume basic apparel.
UBS did cite some "negatives," including the fact that Gildan may now be one of the biggest sock suppliers, but its brands are not leading ones.
In Economy Lab today
Feeling the pinch from high prices at the pump? You're not alone, Tavia Grant reports.
Waiting for a surplus to implement a costly new program may on the surface seem like a prudent way to control government spending. However, since these programs are not one-time costs, but rather ongoing spending, it is in fact a recipe for fiscal disaster, Mike Moffatt writes.
In Personal Finance today
Many things doctors recommend can be eligible for tax credits and deductions, but be sure you have the paperwork to back them up.
A look at quirky and unexpected items Canadians have tried to get past the Canada Revenue Agency - often successfully.
We're all feeling the sting of higher food and gas prices, but it won't fuel an interest rate increase, Rob Carrick writes.
From today's Report on Business
- Air Canada to launch cut-rate carrier
- BMO probed over insurance rules
- Boyd Erman: For big gold miners it's buy first, answer questions later
- GM dealers sue in fight to stay in business