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These are stories Report on Business is following Friday, Sept. 19, 2014.

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Investors relieved, but …
The week for investors began with two big "risk events," and ended with no dramatic change. The outlook, though, is still uncertain.

Financial markets opened the week with many observers expecting a shift at the Federal Reserve, and with the threat of Scottish voters declaring their independence. In the end, the U.S. central bank didn't move, and Scotland voted "No" in an historic referendum.

Both buoyed the markets.

But, as Camilla Sutton sees it, it's still unclear where we go from here.

"I would caution that the reaction in the U.K. isn't notably strong," Scotiabank's chief currency strategist said of the London stock market and Britain's currency.

London's FTSE 100 was up, but some other European exchanges initially made bigger gains. And, as the morning progressed, the win by the "No" camp didn't move the British pound all that much.

While a big risk was taken off the table, Ms. Sutton said, one of the questions now is "how much does the U.K. start to concede power to some of the stronger areas."

Other observers agreed.

"The Scots pulled back from the brink but much now remains to be done," strategists at Société Générale said in a report today.

"Not only do the details of devolution for Scotland have to be worked out but also the U.K. government has to address the demands for English devolution and to correct the imbalances of voting rights within the U.K. parliament," they added.

"This will remain a challenging time for the government in the run-up to next May's general election."

Bank stocks, of course, rallied given that several institutions had threatened to quit Scotland in the event of a "Yes" vote.

All in all, this was the second sigh of relief for markets this week.

On Wednesday, the Federal Reserve placated investors with its ongoing pledge to keep interest rates at rock bottom for a "considerable time" even after its asset-buying program ends next month. Some had expected that to change, and, thus, the central bank remained dovish in its statement.

But the outlook among individual members of the Fed's policy-setting panel – the so-called dot plot – was more hawkish, Ms. Sutton noted.

"The statement was dovish, so markets are struggling to figure it all out," she said today. "So there's uncertainty, and how we should be reacting is unclear."

Here's what some other observers are saying this morning:

"The Scots have voted to remain in the United Kingdom, removing a major threat for the U.K. economy and sterling. [Foreign exchange] markets can re-focus on monetary policy divergence and as the Federal Reserve marches towards the exit from [quantitative easing] and [zero interest-rate policy], the dollar will rally." Kit Juckes, foreign exchange chief, Société Générale

"Markets and any asset that would have been put in jeopardy by a "Yes" vote can rest easy. Sterling rallied after the result became clear, moving above $1.65 for a few hours, before falling about a penny back to yesterday's close - that's still up over 3 cents from the lows seen earlier this month when the polls showed the separatists in the lead. While the threat of Scotland breaking away has passed, the U.K. must now follow through on promises to give the region greater self-governance. We'll have to wait and see if the uncertainty caused by the vote had any impact on U.K. growth. That could impact the timing for the first Bank of England rate hike, which may come as soon as early next year." Benjamin Reitzes, senior economist, BMO Nesbitt Burns

"Yesterday saw the equity markets head higher, giving market-watchers a clue as to how the City felt the Scottish referendum voting would go. Now that any last uncertainty has been removed, Royal Bank of Scotland, Lloyds and Standard Life have shot out of the blocks. A lack of corporate and economic news out today means that it will be interesting to see how much conviction this relief rally really has." Alastair McCaig, market analyst, IG

"The pound, which appeared to anticipate the result in the 24 hours before the result was confirmed, rallied as the results were announced but it has reversed all of its gains since and now trades lower on the day. This is about as clear an example of buying the rumour and selling the news as you can hope to see. With the uncertainty of the referendum now behind us, it will be interesting to see whether the pound can make up the lost ground of the last couple of months or if the dollar can continue to run the show … With the two major risk events of this week now out of the way, the other being the Fed decision, investors have very little to focus on, which is likely to make it a very quiet end to the week." Craig Erlam, market analyst, Alpari

Court rules against banks
The Supreme Court of Canada has ruled against nine of the country's largest financial institutions in a decade-old class action lawsuit that raises questions about provincial power in federally regulated industries, The Globe and Mail's Tim Kiladze reports.

In a widely watched ruling, the Supreme Court found that the plaintiffs have the right to sue multiple banks and credit card companies for failing to disclose certain foreign exchange charges, thereby violating Quebec's Consumer Protection Act.

The lawsuit, which was first filed in 2003, alleges the banks improperly charged or inadequately disclosed fees for currency conversions in credit card transactions. Initially the Quebec Superior Court ruled in favour of the plaintiffs and ordered the nine financial institutions to pay damages that amounted to almost $200-million. The Quebec Court of Appeal, however, largely overturned the ruling.

By the time the Supreme Court took the case on, it had become a landmark lawsuit with big implications for federally regulated industries, such as banking and telecommunications. Canadian banks are governed by the federal Bank Act, and therefore argued that this legislation was 'paramount' to Quebec's Consumer Protection Act.

The Supreme Court, however, ruled otherwise.

Core prices climb
Thank the phone companies and auto dealers for a jump in the inflation measure that guides the Bank of Canada.

So-called core consumer prices, which exclude certain volatile items from overall inflation, rose at a faster annual pace of 2.1 per cent in August, compared to July's 1.7 per cent, The Globe and Mail's Davic Parkinson reports.

That, Statistics Canada said today, was because "some of the components included in the core index, such as telephone services and the purchase of passenger vehicles, increased more in August than in July."

And it send the Canadian dollar higher.

The central bank targets an overall inflation rate of 2 per cent, but looks closely at the core rate.

The overall rate held steady last month at 2.1 per cent, the federal agency said.

On a month-to-month, seasonally-adjusted basis, prices rose 0.1 per cent in August, compared to July's dip of 0.1 per cent.

"Markets will focus more on the annual core inflation which is now at the highest since 2012," said senior economist Krishen Rangasamy of National Bank.

"The improving economy and the earlier depreciation of the Canadian dollar seem to be putting upward pressure on prices," he added.

The central bank has said it believes the recent spike in inflation is temporary.

TransCanada stresses strategy
TransCanada Corp. says it's committed to remaining whole, other than what it has already signalled.

The Canadian pipeline giant said today it was responding to the "significant trading activity" in its stock, and didn't mention the reports yesterday that suggested American hedge funds are eyeing TransCanada as a prospect for a break-up.

Nonetheless, the company stressed that it believes its current strategy is the right one, and noted that it already plans to move the rest of its American natural gas pipeline holdings into its publicly traded master limited partnership.

"TransCanada firmly believes its current corporate form, asset base and financial strength provide critical underpinning to execute the company's industry-leading $38-billion capital program which is expected to generate significant, sustainable growth in future cash flow, earnings and dividends," it said.

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