First Look With Surveillance: RBA Pivot, EU Energy
Australia’s central bank is offering some vindication to prognosticators who’ve been calling (pleading?) for less aggressive rate hikes. The RBA’s quarter-point move was half of what the market anticipated and snapped a streak of four consecutive half-point hikes. And so, we’re off to the races in global markets this morning as major overseas indices spike and futures suggest yesterday’s jump in North America (including the TSX’s biggest single-day spike since April 29, 2020) won’t be a one-day blip.
We’ll gather insight into how much the rest of the world can really glean from Australia’s monetary policy, including the RBA Governor Philip Lowe’s statement that his central bank is aiming to tame inflation “while keeping the economy on an even keel. The path to achieving this balance is a narrow one and it is clouded in uncertainty.”
If you missed it, check out Jacqueline’s interview with ex-Bank of Canada governor David Dodge, who told us yesterday he thinks central banks in North America are “feeling their way” toward a terminal rate that’s likely going to be around four per cent (plus or minus).
HSBC SHOPPING CANADIAN DIVISION
It was only last week that we were reporting on an analyst’s thesis that consolidation could be in the offing for Canada’s smaller lenders. That’s looking like a prescient call (though he didn’t name the institution that’s making news today) after HSBC Holdings Plc confirmed this morning that it’s undertaking a strategic review of its Canadian business, with a sale among the options being considered. We’ll chase reaction and informed perspective on prospective buyers.
VANCOUVER HOUSING CHILL
We’re into the busy couple of days for updates from Canada’s largest housing markets. Yesterday it was Calgary telling us about the drop in sales. Today, it’s the Real Estate Board of Vancouver reporting a 9.8 per cent sequential drop in activity, as 1,687 properties traded hands in September. The REBGV pointed out that was a 46 per cent plunge compared to a year earlier, and almost 36 per cent below a 10-year average for the month. And yet, despite an uptick in listings, the composite benchmark price fell only two per cent from August to $1,155,300.
LEGAULT STEAMROLLS COMPETITION
François Legault’s Coalition Avenir Québec was elected to a decisive majority mandate yesterday, with results showing the CAQ winning or leading in 90 of 125 ridings, while the provincial Liberals are clinging to just 21 seats as the official opposition. We’ll dig into the fiscal and economic policies that Legault hopes will shape the province’s future (particularly with regard to the green economy), and will juxtapose them against some of the social policies that have met opposition in the business community and beyond.
OTHER NOTABLE STORIES
- Definity Financial announced after markets closed yesterday that it paid $217 million to boost its stake in McDougall Insurance to 75 per cent from 25 per cent. McDougall is a brokerage with more than 450 employees and 40 branches, according to the release.
- TC Energy announced this morning it will begin pre-construction work on its first Canadian solar energy project. It said the $146-million Alberta Saddlebrook project will have capacity to generate 81MW of power.
- CIBC announced some senior management changes this morning, including a new head of its U.S. division; Shawn Beber will move into that role after most recently serving as chief risk officer. He succeeds Mike Capatides, who becomes vice-chair for CIBC Bank USA. Frank Guse is being promoted to chief risk officer.
- Centerra Gold said it might repurchase up to 7.1 per cent of its common shares. That was announced a few minutes after it unveiled an extension on the life of its Mount Milligan mine in British Columbia and boosted the deposit’s proven and probable reserves.
- Torex Gold Resources said it is now able to begin operations at its Media Luna project after receiving a key environmental permit from Mexico’s environmental and natural resources ministry.
- Lightspeed Commerce announced it hired Ryan Tabone as its chief product and technology officer. Tabone was most recently at Google where he’s credited with helping to build Chromebook and having served as Vice-President and General Manager of Google Finance and Google Pay.
- Notable data: Real Estate Board of Greater Vancouver releases monthly sales
- 900: Auditor General Karen Hogan addressing Senate Standing Committee on National Finance hearing “Study matters relating to federal estimates generally and other financial matters”
- 1030: Prime Minister Justin Trudeau makes announcement in Dartmouth, N.S. (plus avail)
- 1400: Natural Resources Minister Jonathan Wilkinson speaks at Calgary Chamber of Commerce event