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These are stories Report on Business is following Tuesday, Oct. 25. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

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Markets await Carney The Bank of Canada isn't expected to change its benchmark interest rate this morning from its current 1 per cent, but markets are watching closely for tone and signals. Today's policy announcement will be followed by tomorrow's Monetary Policy Report, which is expected to contain updated forecasts.

Here's what some analysts expect:

"The tone of the communiqué will likely be relatively dovish. The communiqué is also likely to acknowledge that increased tensions in Europe are responsible for the retrenchment in risk-taking and should act as a significant drag on growth in Europe, with some negative spillover to the Canadian economy. On the flip side, the BoC may acknowledge that the growth outlook for the U.S. has not deteriorated since the September meeting." Charles St-Arnaud, Nomura

"We have no doubt that the bank will hold its policy rate at 1 per cent. Considering the recent concern expressed both by the governor and senior eeputy governor on Europe's financial mess, we would be surprised if the written policy statement continued to mention there was any need to withdraw monetary policy stimulus at all. As such, we think the bank will continue to keep rates on hold for the foreseeable future, consistent with our long-held view." David Madani, Capital Economics

"The Bank of Canada won't surprise markets at its policy meeting ... shrugging off upside surprises to core inflation and holding rates at a stimulative 1 per cent, pointing to external uncertainty and sluggish growth. The MPR release (Wed) should add more colour to the BoC's cautious outlook, likely to include downgrades to prior growth forecasts." Emanuella Enenajor, CIBC World Markets

"Expect a stand-pat policy with a dovish bias in the statement and the MPR. The BoC will likely revise its 2011 growth forecast lower (2.8 per cent in the July MPR, versus Scotia's 2.1 per cent) and perhaps its 2012 figure of 2.6 per cent. The output gap estimate would thus widen with balance perhaps being pushed out further again." Derek Holt, Karen Cordes Woods, Scotia Capital

India's central bank hikes rates India's central bank hiked interest rates by another quarter of a percentage point today, but that appears to be it for now.

The Reserve Bank of India has been focused on inflation, but is turning its attention to the global turmoil and the potential impact on the economy.

"The tone of the accompanying statement was more dovish with a greater emphasis on downside risks to growth and signs of optimism that inflation pressures will start to ease in coming months," said analysts at RBC's emerging markets group after the central bank hiked its key rate to 8.5 per cent from 8.25 per cent.

"As a result, the RBI's current assessment is that there is a 'relatively low' chance that further rate hikes will be required at the next policy meeting in December. Nevertheless, further rates hikes can not yet be ruled out if inflation fails to fall as quickly as the RBI hopes. In contrast to previous statements, the RBI is now clearly increasing its focus on risks to the growth outlook. Growth risks are now considered to be 'undoubtedly significant' and 'need to be given due consideration.'"

Euro tensions run high Tensions are running high in the euro zone ahead of tomorrow's summit.

Italy has yet to tell the markets what it plans to do in terms of reform - it's being pushed by Germany and France - while Greece's Prime Minister George Papandreou gave a rousing talk today about how his country is going to be reborn when all is said and done.

Leaders of the 17-member monetary union are expected tomorrow to continue discussions - and maybe evern reach conclusions? - on a sweeping plan that would shore up euro zone banks, increase the heft of the region's bailout fund, known as the EFSF, and bring so-called haircuts among holders of Greek debt to up to 60 per cent, far more than originally planned.

"Financial institutions will not be too pleased at an outcome that hits the upper end of expectations but Greek banks are the ones most significantly at risk," said Elsa Lignos, senior currency strategist at RBC in London. "From a wider market perspective, it remains to be seen how far haircuts can be stretched before CDS is triggered."

As Derek Holt and Karen Cordes Woods of Scotia Capital point out, the outlook is far from certain.

"There is precious little that is new to point to by way of developments in Europe apart from the ongoing tensions concerning the extent to which Greek debt may be written down," the economists said today.

"Policymakers have a unified mandate to seek a 'voluntary' 60-per-cent writedown in contrast to ISDA's caution that there are limits to what constitutes a voluntary mark down (ie: without triggering a credit event that would invoke CDS coverage and potentially rock markets) and in contrast to push back from European banks," they said in a research report, pointing also to tomorrow's vote in the German parliament over the bailout fund.

"Tomorrow's vote in the Bundestag regarding the vague outline for EFSF plans will only be the first of several it seems as others including Finland and the Netherlands state their intentions to put the overall package of proposals coming out of this week's summit to another parliamentary vote. That could add at least several weeks of delays, amid greater uncertainty toward the outcome than the votes on the July proposals."

Markets muted Global stock markets are mixed – and muted - this morning in the run-up to a second euro summit tomorrow.

``Global equity markets are relatively quiet this morning as the European leaders prepare to meet again on Wednesday while yesterday's positive data out of China is helping to keep the commodity rally alive,`` said Carl Campus of BMO Nesbitt Burns.

Tokyo's Nikkei slipped 0.9 per cent, but European exchanges are moving higher. London's FTSE 100 and Germany's DAX were up, and the Paris CAC 40 down, by about 7:15 a.m. ET.

"It's been a relatively tame start to Tuesday's session in London and early losses on the index have been reversed, but there are limited signs of further momentum," said Ben Critchley of IG Index in London.

CP profit dips Canadian Pacific Railway Ltd. remains "vigilant" where Asia is concerned, the railway said today as it posted a dip in third-quarter profit.

Profit slipped by just over $10-million from a year earlier to $186.8-million or $1.10 a share, while revenue climbed to $1.3-billion.

"We currently see strength in our bulk franchise, but remain vigilant in monitoring economic signals from Asia," said chief executive officer Fred Green. "We are focused on sustaining and improving service and productivity through investments in locomotives, infrastructure, people and technology."

BP rebounds BP PLC heralded a "turning point" today as the energy giant continued to rebound from the massive oil spill in the Gulf of Mexico with sharply higher profits.

BP's profit climbed to $4.9-billion (U.S.) in the third quarter from $1.8-billion a year earlier, and revenue jumped more than 30 per cent to almost $98-billion.

BP also said it plans to divest some $15-billion more in assets than it had previously planned, bringing its asset sales to $45-billion by the end of 2013.

"BP was severely tested by the Deepwater Horizon accident," said chief executive officer Bob Dudley.

"It is now over a year since the well was finally sealed and we have continued to respond with a strong sense of corporate responsibility."

Salaries to rise Most Canadian workers will still see higher salaries next year, despite a rocky global economy, but pay hikes won't return to the pre-recession heyday.

Employees will get average salary increases of 3.1 per cent in 2012, the Conference Board of Canada said in its compensation outlook to be released today, The Globe and Mail's Tavia Grant reports today.

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In Economy Lab The idea that a healthy lifestyle substantially decreases demand on the health care system has been repeatedly shot, stabbed, and poked at with sharp sticks, but it won't just die. Chris Auld looks at the issue.

In International Business Barack Obama, faced with 14 million unemployed workers and a jobless rate that won't budge, is tackling the U.S. economic crisis by focusing on where it began: the housing market. The Globe and Mail`s Steve Ladurantaye reports.

In Globe Careers At some point in our careers, we're likely to be asked to speak in public, and it's essential to be able to communicate with confidence when we're thrust into the spotlight. The Globe and Mail`s Dianne Nice reports.

From today's Report on Business

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