Five Things To Watch For In The Canadian Business World Over the Next Few Days

If you are a part of the Canadian business world, you need to know about a few critical changes to look forward to over the next few days.

Bank of Canada's Interest Announcement

The Bank of Canada will make the interest rate announcement on Wednesday. It will release its monetary policy report that will include an updated forecast for the economy. Economists expect the central bank to raise the key policy rate by three-quarters of a percentage point to help slow down inflation.

Suncor Energy Inc.'s Presentation

Suncor Energy Inc. will offer an update regarding its oilsands operations on Wednesday. The company faced criticism sometime back from U.S.-based activist investor Elliott Investment Management. The latter has a record of targeting large corporations it thinks are underperformers.

Cogeco Inc. and Cogeco Communications Inc. Results

Cogeco Inc. and Cogeco Communications Inc. will report their third-quarter results on Wednesday after the close of financial markets. It will also hold a conference call with analysts on Thursday morning.

Other Economic News You Can't-Miss

Statistics Canada is expected to release its monthly survey of manufacturing for May on Thursday. It will also release the figures for wholesale on Friday.

Home Sales

On Friday, the Canadian Real Estate Association will release home sales figures for June. Home sales in May reduced by 22 percent compared with a year earlier.

Laying Out the Scenarios

Bank of Canada governor Tiff Macklem and his chief deputy, Carolyn Rogers, laid out their most ominous scenarios during a recent news conference. Bank of Canada has warned typical mortgage payments could be 30% higher in 5 years.

Macklem and Rogers have also insisted that the vast majority of Canadians paid off their mortgages or had manageable debt. They also insisted the wider financial system was in little danger.

As there is a need to fight inflation with rising interest rates, people who got in at the peak might face some trouble, especially if they lose their jobs. Though the job numbers are predicted to remain strong, things can change in a period of rising rates.

Macklem said, "If the economy slowed sharply and unemployment rose considerably, the combination of more highly indebted Canadians and high house prices could amplify the downturn." The central bankers also reminded everyone that, in theory, the most recent buyers had a financial pad as "stress test" rules required buyers to have the financial capacity to pay much more than mortgage lenders were asking.

However, it did not mean young buyers had set aside the cash in an emergency account. They might have spent it on the inevitable necessities that come with a new home. Macklem added, "If those highly indebted households lose their jobs, they would likely need to reduce their spending sharply to continue servicing their mortgage." Macklem didn't say where highly indebted and newly unemployed people would get the cash to do that.




Previous Post Next Post