Bank of Canada Rate Decision
The Bank of Canada will make its key interest rate announcement on Wednesday. The overall expectation is that there will be no change to the central bank’s overnight interest rate. What is perhaps most anticipated, however, is the speech by deputy governor Timothy Lane to the Ottawa Board of Trade on Thursday. His address could contain indications of where interest could be heading in the new year.
The BoC rate is currently at 1.75%, a level it has held since October 2018, when it was raised from 1.5%.
Jobs Report Due Out Friday
Statistics Canada will release its jobs numbers for November on Friday. The monthly Labour Force report is expected to confirm whether the previous month’s unexpected drop in the number of jobs in Canada economy was a blip or the start of a downward trend.
In October, the Canadian economy lost an unexpected 1,800 jobs, a stark departure from the gain of close to 16,000 analysts were expecting. But despite the dip in the job numbers, the national unemployment rate remained unchanged at 5.5%.
In October, the economy lost 16,100 full-time positions and gained 14,300 part-time posts, for the net lost of 1,800 jobs. But the fact more full-time jobs were eliminated raised a bit of a red flag. The number of self-employed Canadians fell by 27,800 in October as well.
Canada’s Big Banks Reports
Last week, Scotiabank (TSX:BNS) kicked off the round of earnings reports for Canada’s big six banks. This week, the others follow, with the Bank of Montreal (TSX:BMO) set to unveil its latest earnings Tuesday, the Royal Bank (TSX:RY) and the National Bank (TSX:NA) on Wednesday, while the Toronto Dominion (TSX:TD) and the Canadian Imperial Bank Of Commerce (TSX:CM) round out the week on Thursday.
Scotiabank reported a 1.6% rise in profit, a mark that was slightly better than what analysts were expecting.
But when it comes to expectations, the bar is not too high. With ongoing economic uncertainties persisting due to the protracted China-U.S. trade pact negotiations, analysts are predicting that Canada’s big banks will post their worst numbers since the global financial crisis.
The Bank of Nova Scotia is Canada’s third largest lender.
Notable Earnings Reports To Watch
Aside from most Canadian banks earning reports, the roster of corporate financials being disclosed this week is thin. One standout is discount retail giant Dollarama Inc . (TSX:DOL) It will unveil its third-quarter results on Wednesday. The company, with a market cap of $15.27 billion, has seen its earnings drop in the previous two quarters. The ongoing trade war between the U.S. and China is proving to be challenging the retailer’s ability to find cheap products that customers want.