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Noah Zivitz

Managing Editor, BNN Bloomberg

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The Bank of Canada defied market expectations today by keeping its main policy rate at 0.25 per cent. That’s even though it says economic slack has now been absorbed and as it paints the picture of a inflation that will “decline reasonably quickly” to approximately three per cent by the end of this year. So now what? The bank has now decided to remove its “extraordinary commitment” to keep rates at the lower bound, and say it expects rates will need to rise. So the next question becomes, when?

After the decision, I am confident in saying you won’t find more comprehensive analysis anywhere else. We’ve got macro strategy, fixed income, mortgages, insolvency and banking experts teed up from 10-11am. Then, Ed Devlin – formerly PIMCO’s top Canadian lieutenant – will help us make sense of Governor Tiff Macklem’s news conference. There will be no better place to understand what the Bank of Canada’s decision means for the economy and your money.

…AND THEN, THE FED (WITH STOCKS BOUNCING)

What a day this is going to be, with the U.S. Federal Reserve delivering its policy decision at 2 p.m. After a stretch of choppy trading sessions, U.S. futures are pointing to a solidly higher open ahead of the Fed (perhaps thanks in part to Goldman Sachs now telling clients to buy on weakness).

Which begs all sorts of questions, like: Will we get the clear telegraphing of a rate hike in March, as investors expect? What about the pace of tapering asset purchases? And can Chair Jerome Powell thread the needle in his news conference without exacerbating market jitters? We’ll lean on our Bloomberg Television partners for breaking news coverage and then Greg will take us home in The Close at 3 p.m. with a stacked lineup, including BMO’s head of fixed income and Desjardins’ brand new head of macro strategy, Royce Mendes.

CN SELECTS NEW CEO, MAKES PEACE WITH ACTIVIST

Canadian National Railway CEO Jean-Jacques Ruest is passing the baton on a high note. The rail operator selected TC Energy's Tracy Robinson (who was serving as president of Coastal GasLink) as its next chief executive, appointed former Quebec Premier Jean Charest to its board, and called a truce with U.K. activist investor TCI by agreeing to add two independent directors to its board before its next annual meeting. That flurry of news came a few minutes after CN reported a 20 per cent surge in fourth-quarter adjusted profit, a record low adjusted fourth-quarter operating ratio, and tossed in a dividend hike and new share buyback program. Dave will dig into what awaits Robinson and what CN’s management said about supply chains (including the ripple effect from trucker vaccine mandates) and the recovery from B.C. flooding.

BELL LET’S TALK

This is the day when our parent company draws attention to mental health awareness; we’ll talk with MindBeacon Executive Chair Sam Duboc at 1:20 p.m. about this imperative. And, managers take note: The Street will check in with a clinical psychologist at 8:35 a.m. about wellbeing in the workplace.

OTHER NOTABLE STORIES

  • From the war for talent files: TD Bank Group announced this morning it’s planning to hire more than 2,000 technology workers this year. In a release, one of the bank’s vice-presidents said it’s “undeniably an incredibly competitive landscape” as TD battles with Big Tech and fintech for talent.
  • Microsoft was initially punished by investors after revenue growth in its Azure cloud business slowed to a mere 46 per cent in the fiscal second quarter. Shares later moved into positive territory in extended trading after management said on a conference call it expects Azure’s revenue growth will accelerate in the current quarter.
  • Some consolidation today in the agriculture industry as Viterra announced it’s buying the grain and ingredients business owned by Nebraska-based Gavilon Agriculture Investment. The deal is worth US$1.125 billion.
  • The cost of dealing with problems in Boeing’s 787 program is mounting. The plane maker today doubled its estimate of abnormal costs associated with the jets at US$2 billion and it booked a US$3.5-billion charge in the latest quarter due to delivery delays and “associated customer considerations.”

NOTABLE RELEASES/EVENTS

  • Notable data: Canadian wholesale trade (December early indicator), U.S. new home sales
  • Notable earnings: AGF Management, Celestica, Methanex, AT&T, Boeing, Tesla, Intel, Kimberly-Clark
  • 900: Kinder Morgan investor day meeting
  • 1000: Bank of Canada releases interest rate decision and Monetary Policy Report (plus 1100 news conference)
  • 1300: U.S. President Joe Biden meets with CEOs at the White House to discuss his agenda
  • 1400: U.S. Federal Reserve releases interest rate decision (plus 1430 news conference)
  • 1630: Prime Minister Justin Trudeau holds media avail after cabinet retreat
  • World Economic Forum releases Global Competitiveness Report