Via Reuters:
08:59 01Jun10 RTRS-BANK OF CANADA RAISES KEY RATE BY 25 BASIS PTS TO 0.50 PCT, SAYS WILL CAREFULLY WEIGH FURTHER HIKES AGAINST DOMESTIC, GLOBAL ECONOMIC DEVELOPMENTS
08:59 01Jun10 RTRS-BOC SEES “CONSIDERABLE UNCERTAINTY” SURROUNDING OUTLOOK, CITES POSSIBILITY OF RENEWED WEAKNESS IN EUROPE
08:59 01Jun10 RTRS-BOC SAYS MOVE STILL LEAVES CONSIDERABLE MONETARY STIMULUS IN PLACE IN LIGHT OF SIGNIFICANT EXCESS SUPPLY, STRONG DOMESTIC SPENDING, UNEVEN GLOBAL RECOVERY
08:59 01Jun10 RTRS-BOC SAYS ACTIVITY IN CANADA UNFOLDING LARGELY AS EXPECTED, CPI IN LINE WITH APRIL PROJECTIONS
08:59 01Jun10 RTRS-BOC SAYS CANADA HOUSEHOLD SPENDING EXPECTED TO SLOW , PICKUP IN BUSINESS INVESTMENT IMPORTANT FOR BALANCED RECOVERY
08:59 01Jun10 RTRS-BOC-SPILLOVER TO CANADA FROM EUROPE HAS BEEN LIMITED TO MODEST FALL IN COMMODITY PRICES, TIGHTER FINANCIAL CONDITIONS
08:59 01Jun10 RTRS-BOC SAYS HOUSEHOLD, BANK AND SOVEREIGN DELEVERAGING WILL ADD TO VARIABILITY AND TEMPER PACE OF GLOBAL GROWTH
08:59 01Jun10 RTRS-BOC-RECENT EUROPE TENSIONS WILL LIKELY RESULT IN HIGHER BORROWING COSTS AND FASTER TIGHTENING OF FISCAL POLICY IN SOME COUNTRIES
08:59 01Jun10 RTRS-BOC-IN MOST ADVANCED ECONOMIES THE RECOVERY IS HEAVILY DEPENDENT ON MONETARY AND FISCAL STIMULUS
08:59 01Jun10 RTRS-BOC TO RE-ESTABLISH NORMAL OVERNIGHT MARKET OPERATIONS, WITH TARGET FOR O/N RATE AT MIDPOINT OF OPERATING BAND
08:59 01Jun10 RTRS-BOC SAYS WILL MAKE 0VERNIGHT STANDING PRA A PERMANENT PART OF FRAMEWORK, WILL CONDUCT SPRAS AS NEEDED
From the wire:
-BANK OF CANADA CUTS KEY RATE BY 25 BP TO 0.25 PCT; NARROWS OPERATING BAND TO 1/4 POINT FROM 1/2 PT
BOC - WILL PROVIDE FRAMEWORK ON THURS FOR NONCONVENTIONAL POLICY, DOESN’T COMMIT TO IMMEDIATE ACTION
BOC-OVERNIGHT TARGET RATE BECOMES DEPOSIT RATE, WHICH IS LOWER LIMIT OF OPERATING BAND
-KEY RATE CAN BE EXPECTED TO STAY UNCHANGED UNTIL END Q2 2010, CONDITIONAL ON INFLATION OUTLOOK
-BOC SEES GDP GROWTH -3 PCT IN 2009 (REV FROM -1.2 PCT IN JAN), +2.5 PCT IN 2010 (REV FROM +3.8 PCT)
-BOC SEES 2011 GDP GROWTH +4.7 PCT, PRODUCTION CAPACITY REACHED IN Q3 2011 (REV FROM MID-2011)
-BOC SAYS REVISES DOWN POTENTIAL GROWTH DUE TO RESTRUCTURING IN SEVERAL SECTORS
-BOC-CPI TO TROUGH AT -0.8 PCT IN Q3 (REV FROM -1 PCT), RETURN TO 2 PCT IN Q3 2011 (REV FRM MID-2011)
-BOC-CORE CPI TO DIMINISH THROUGH 2009, RETURN TO 2 PCT TARGET IN Q3 2011 (REV FROM MID-2011)
-BOC-RISKS TO INFLATION PROJECTION ARE TILTED SLIGHTLY TO DOWNSIDE
-BOC TO ROLL OVER PORTION OF EXISTING TERM PRA AGREEMENTS AT LONGER TERMS TO REINFORCE OVERNIGHT RATE
-BOC TO TARGET BALANCE OF C$3 BLN IN SETTLEMENT SYSTEM INSTEAD OF C$25 MLN TO REINFORCE O/N RAT
I’ve highlighted the most important part of the Bank of Canada announcement. The fact that the bank will keep interest rates at 0.25% for over a year will have a significant impact on the marketplace. Already yields on short term investments have plummeted. If the government plans on quantitative easing (printing money to buy government bonds), then yields will drop on longer term investments.
This will have an eventual impact on mortgage rates, to the benefit of borrowers. So for all those thinking about switched from variable to fixed mortgages, wait a little while longer. Rates are deffinetely not going up any time soon.
Breaking News Via Reuters:
-RTRS-U.S. FED CUTS BENCHMARK FED FUNDS RATE 1/4 POINT TO 2 PCT, DISCOUNT RATE 1/4 TO 2.25 PCT
-RTRS-FED SAYS UNCERTAINTY ABOUT INFLATION OUTLOOK REMAINS HIGH
-RTRS-FED SAYS READINGS ON CORE INFLATION SOMEWHAT IMPROVED, BUT ENERGY, COMMODITY PRICES UP
-RTRS-FED SAYS SOME INDICATORS OF INFLATION EXPECTATIONS HAVE RISEN RECENTLY
-RTRS-FED SAYS EXPECTS INFLATION TO MODERATE IN COMING QUARTERS
-RTRS-FED SAYS ENERGY, COMMODITY PRICES TO LEVEL OUT, PRESSURES ON RESOURCE UTILIZATION TO EASE
-RTRS-FED SAYS SUBSTANTIAL EASING OF POLICY, LIQUIDITY MEASURES SHOULD HELP PROMOTE GROWTH, MITIGATE RISKS
-RTRS-FED SAYS RECENT ECONOMIC ACTIVITY REMAINS WEAK, HOUSEHOLD, BUSINESS SPENDING SOFTENED FURTHER
-RTRS-FED SAYS FINANCIAL MARKETS REMAIN UNDER STRESS, TIGHT CREDIT, HOUSING DOWNTURN TO WEIGH ON GROWTH
Apple released the following earnings summary:
“APPLE REPORTS RECORD SECOND QUARTER RESULTS
APPLE INTERNATIONAL CO LTD Q2 SHR $1.16
SEES Q3 2008 SHR ABOUT $1.00
Q2 REVENUE $7.51 BLN
SEES Q3 2008 REVENUE ABOUT $7.2 BLN
SAYS QUARTERLY IPHONE(TM) SALES WERE 1,703,000
SAYS APPLE SHIPPED 2,289,000 MACINTOSH COMPUTERS DURING THE QUARTER
SAYS SOLD 10,644,000 IPODS DURING THE QUARTER”
This info was pulled from the news release off the wire service, sorry for the weird format.
It should be noted that Apple’s shares slipped about 1% during after hours trading. Apparently, their projections for the upcoming third quarter were a bit lower than expected.
Via Reuters:
” OTTAWA, April 22 (Reuters) – The Bank of Canada cut its benchmark interest rate on Tuesday by a half-percentage point to 3 percent, as expected, and signaled that further easing was required but suggested it might pause before cutting again.
In a statement which projected a steeper U.S. economic downturn that would dampen Canadian growth, the bank said “further monetary stimulus will likely be required,” but dropped a previous reference to the need for more cuts in the “near term.”
