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These are stories Report on Business is following Tuesday, Feb. 3, 2015.

Follow Michael Babad and The Globe's Business Briefing on Twitter.

Whither Mr. Poloz?
A big question in the markets is where the Bank of Canada goes next.

And at least one forecaster believes it will cut right to the bone.

In a new projection today, HSBC Bank PLC predicts the central bank will trim its benchmark rate again in the current quarter to 0.5 per cent, and then again in the second quarter of the year to just 0.25 per cent.

It was just last week that Bank of Canada Governor Stephen Poloz and his colleagues surprised the markets with a cut of one-quarter of a percentage point to 0.75 per cent, fuelling speculation that they could move again.

Indeed, Mr. Poloz, calling the cut an "insurance policy" amid the oil slump, said he was prepared to act further if need be.

David Watt, HSBC's chief economist in Canada, said the central bank will in fact have to "remain cautious" for the rest of the year.

"The Canadian economy is going to be vulnerable through the first half of this year," he added.

Before the oil rout, economists had expected a "rebalancing" in the economy toward exports and business investment, from the consumer spending and housing action that had fuelled growth.

But now, Mr. Watt said, investment in the oil patch is obviously going to suffer.

Energy companies already are slashing their budgets and starting to lay off workers.

Others are also speculating on a second rate cut from Mr. Poloz, though, just an example, CIBC World Markets expects him to go to 0.5 per cent and no further.

Still others, such as chief Canadian economist Mark Hopkins of Moody's Analytics, expect Mr. Poloz to simply hold steady at the current rate for quite some time.

"Given the offsetting impact of the exchange rate and the strength of core inflation, a second rate cut is unlikely but cannot be ruled out," Mr. Hopkins said in a recent report that projects Mr. Poloz will simply stand pat into next year.

"By surprising markets with a rate cut, Poloz is effectively putting the bank's money where, up to now, only his mouth has been," he added.

With speculation over interest rates, of course, come projections for the Canadian dollar, which has suffered mightily from the drop in oil and the latest Bank of Canada decision.

Observers believe the currency, which has rallied over the past two days along with oil, will sink further still, to somewhere around the 75-cent mark.

Some, though, go even lower. Morgan Stanley, for example, recently called for the Canadian dollar to sink to a low of just above 71 cents by the end of next year.

The currency staged another sharp rally today, rising as high as 80.81 cents from a low of 79.9 cents.

Like the Bank of Canada, other central banks are certainly wasting no time in slashing their benchmarks.

Just today, the Reserve Bank of Australia trimmed its cash rate by one-quarter of a percentage point, to 2.25 per cent, also somewhat of a surprise to the markets.

It became the latest among several central banks to cut. And we're only just into February.

"Who's next in the race to cut rates?" said senior economist Benjamin Reitzes of BMO Nesbitt Burns.

"The [Reserve Bank of New Zealand] turned dovish last week. The next step would be start reversing some of last year's tightening."

The Reserve Bank of India, by the way, held rates steady today.

EPA warns on Keystone
The U.S. Environmental Protection Agency says the long-delayed Keystone XL pipeline would "significantly increase" the greenhouse-gas emissions from the oil sands, a key test President Barack Obama has set in making his decision on whether the approve the project, The Globe and Mail's Shawn McCarthy reports.

In a letter released today, the EPA's Cynthia Giles undercut longstanding assurances that the pipeline project would not have an impact on Canadian emissions. She said the State Department's environmental impact analysis concludes the pipeline would result in as much as 27.4 million metric tonnes of carbon dioxide equivalents per year – equivalent to the emissions from 5.7 million passenger vehicles.

S&P in settlement
Standard & Poor's and its parent company have put the financial crisis behind them. At a big cost.

The ratings agency and McGraw Hill Financial Inc. today unveiled a $1.5-billion (U.S.) settlement with the Department of Justice and several states over ratings of mortgage-backed securities and other paper in the run-up to the crisis between 2004 and 2007.

There were "no findings of violations of law," McGraw Hill said in a statement.

The settlement will see payments of $687.5-million to the DOJ and an equal amount to 19 states and the District of Columbia.

A separate deal will involve a payment of $125-million to the California Public Employees' Retirement System, or Calpers.

Athens spurs hope
There's optimism in the euro zone today that the new radical Greek government won't be so radical, after all.

At least when it comes to negotiations with the folks who bailed out the old government.

Reports suggest that Finance Minister Yanis Varoufakis, who is touring Europe, has floated the idea of swapping debt for new paper that would be tied to economic growth.

That, said chief analyst Michael Hewson of CMC Markets, has "soothed fears" that the new government was poised for a pitched battle with the rest of Europe that could lead to its exit from the monetary union.

"While the initial proposals could well run into obstacles with respect to EU rules about monetary financing the fact that a new approach is being tried has to be welcome given how much of a disaster the current bailout program has been," Mr. Hewson said.

"The key question now is whether EU leaders and in particular the ones in Berlin, as well as the [European Central Bank] are prepared to give the new proposals a decent hearing over the next few weeks as the proposals are fleshed out, or whether they get dismissed."

Like Mr. Hewson, other observers also noted that it will come down to how the government of German Chancellor Angela Merkel feels about it.

"Greece's problems are far from over but as far as the markets are concerned calm as been restored; a disorderly exit is not on the menu, although the Germans have yet to speak on the matter," said analyst David Madden of IG in London.

"Until Berlin has its say, nothing is certain."

Canadian solar in deal
Canadian Solar Inc. is positioning itself to get into the power-plant business with the $265-million (U.S.) all-cash acquisition of a California solar energy developer, The Globe and Mail's Bertrand Marotte reports.

Guelph, Ont.-based Canadian Solar said late yesterday it has an agreement with Sharp Corp. of Japan to buy its subsidiary, San Francisco-based Recurrent Energy LLC.

Canadian Solar chief executive officer Shawn Qu said the transaction will allow the company to extend its business into possible ownership and operation of solar power plants.

Is the stress of your job killing you?
Workplace stress is killing more than 120,000 Americans a year and driving up health care costs, a new study finds.

It's true that American and Canadian health care systems are different, but such stress spans borders.

"People spend a lot of their waking hours at work," says the report by Joel Goh, an assistant professor of business administration at the Harvard Business School, and his colleagues at Stanford University's Graduate School of Business, professors Jeffrey Pfeffer and Stefanos Zenios.

"Therefore, work environments are consequential not just for stress and feelings of competence and control but also a locus of a person's identity and status," they added in the study, which will be published in Management Science.

"It is, therefore, scarcely surprising that the work environments created by employer decisions can have profound effects on mental and physical wellbeing and, consequently, morbidity, mortality, and health care costs."

The researchers studied 10 stress points, many of which, of course, are similar in Canada.

Having said that, the main problem is a lack of health insurance, so, of course, there's a difference. But unemployment, job insecurity and the heavy demands of the workplace aren't so different.

They researchers also looked at shift work, long working hours, the conflict between work and home and "low organizational justice," among other things.

Recent findings also indicate that "employers can potentially take measures to improve employee health by engaging in managerial practices that mitigate or reduce these stressors," says the report by Mr.  Goh.

The researchers note, by the way, that their study is "conservative" on several fronts.

"First it only estimates the costs and morbidity for the individual in the workplace who faces the actual exposure, and does not account for any health consequences to the individual's social network," they write.

"For example, a stressed worker might abuse alcohol or tobacco, which are well-known risk factors for detrimental psychological and physical health in his/her family members."

They also warn of the "overall implication" of their work: "The estimated effect of these workplace stressors is substantially large."

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