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These are stories Report on Business is following Wednesday, Oct. 23, 2013.

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Poloz to trim forecast
The Bank of Canada is expected to trim its near-term economic forecasts this morning.

The devil will be in the details.

Governor Stephen Poloz and his central bank colleagues won't change their overnight rate, and aren't likely to signal a change in their outlook for the benchmark, which stands at 1 per cent.

But they will unveil their revised projections when they release their statement and monetary policy report at 10 a.m. ET.

Senior deputy Tiff Macklem has already said that the central bank now projects economic growth of between 2 per cent and 2.5 per cent for the second half of this year, down from an earlier average of 3.2 per cent.

In its summer monetary policy report, the Bank of Canada projected growth of 1.8 per cent for this year over all, and 2.7 per cent for 2014.

Observers expect that to change today, based on Mr. Macklem's signal in an October speech, and various indicators.

Charles St-Arnaud, for example, believes the central bank well revise that two-year call to around 1.5 per cent and 2.2 per cent.

Derek Holt and Dov Zigler of Bank of Nova Scotia expect a hefty revision today.

"It's possible that the BoC overestimated underlying trend momentum in Canadian growth, but also overestimated the down-and-then-up shock effects stemming from the flooding in Albert and Quebec's construction strike – both of which occurred in June," they said.

The Globe and Mail's Barrie McKenna will report on the Bank of Canada outlook this morning.

Markets slip
Well, the party had to end at some point.

Global markets are sinking so far this morning as investors turn their attention to corporate earnings.

"Europe sits in the red this morning following some poor results from corporate big hitters, as investors acclimatize to life after the debt crisis," said senior sales trader Toby Morris of CMC Markets in London.

"With the all engulfing charade in the rear view mirror for now, a poor Asian session fuelled by Chinese debt fears and weak numbers from Heineken and ST Micro was enough to keep markets in risk off mode this morning."

Tokyo's Nikkei fell by 2 per cent today, and Hong Kong's Hang Seng by 1.4 per cent.

In Europe, London's FTSE 100, Germany's DAX and the Paris CAC 40 were down by between 0.3 per cent and 0.7 per cent by about 8:35 a.m. ET.

Dow Jones industrial average and S&P 500 futures also slipped.

Caterpillar sees trouble
Citing a "difficult" year and global uncertainty, Caterpillar Inc. today posted a drop in third-quarter profit and cut its forecast for the year amid a decline in the mining industry.

Its shares are down almost 5 per cent within about 40 minutes of the New York open.

The industrial machinery giant's profit sank to $946-million (U.S.) or $1.45 a share from $1.7-billion or $2.54 a year earlier. Revenue plunged to $13.4-billion from $16.4-billion.

Caterpillar also trimmed its projections for 2013, now expecting revenue of about $55-billion, down from a range of $56-billion to $58-billion.

It also cut its forecast for earnings per share to about $5.50.

"Not only is mining down from 2012, the demand for equipment has been difficult to forecast," Caterpillar said in a statement, though it noted "continuing strong" commodities production.
"Orders for new mining equipment began to drop significantly in mid-212 and have continued at very low levels."

Encana rebounds
Encana Corp. today boasted of "rapid progress" as it rebounded to a third-quarter profit.

Its stock is up almost 1.8 per cent within about 40 minutes of North American markets opening.

The Canadian energy giant today posted a profit of $188-million (U.S.) or 25 cents a share, compared to a loss a year earlier of $1.2-billion.

Operating earnings slipped to $150-million or 20 cents a share, beating the estimates of analysts, from $263-million or 36 cents.

"We are making rapid progress in the development of our strategy and reached a major milestone with the recent announcement of our new organizational structure and senior management team," said chief executive officer Doug Suttles.

"We're focusing our energy on finalizing our strategy which will inform our capital allocation decisions for 2014 and beyond," he added in a statement.
"Our goal is to make Encana a more focused, dynamic and efficient organization."

CP sees strong quarter
Canadian Pacific Railway Ltd. today posted record earnings in the third quarter and says its efficiency drive has resulted in the lowest operating ratio in company history, The Globe and Mail's Bertrand Marotte reports.

Calgary-based CP boasted a third-quarter profit of $324-million or $1.84 per share, up from $224-million or $1.30 in the year-earlier period.

The third-quarter operating ratio — a key measure of efficiency (operating costs as a percentage of revenue) – dropped to 65.9 per cent, or 820 basis points from the year-earlier period.

"We enter the fourth quarter with momentum and are well positioned for what I believe will be a record 2013," said chief executive officer Hunter Harrison.

Spain inches ahead
Spain appears to be finally out recession, but hardly out of trouble.

The Bank of Spain today estimated that the economy expanded by 0.1 per cent in the third quarter of the year, after nine straight quarters of contraction sparked by a housing bust.

"During the third quarter, the gradual improvement in the Spanish economy seen since the beginning of the year continued, against a background of some easing in financial tensions and improved confidence," the central bank said in its quarterly report.

Spain has far, far to go. More than one-quarter of its work force is unemployed, while the jobless rate among young people stands at a stunning 56 per cent.

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