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.
Sources:
https://www.timminstoday.com/business-news/five-things-to-watch-for-in-the-canadian-business-world-in-the-coming-week-5567271
https://www.cbc.ca/news/business/canada-financial-system-column-don-pittis-1.6481496
https://www.thestar.com/business/2022/07/10/five-things-to-watch-for-in-the-canadian-business-world-in-the-coming-week.html