Author: Consultant

There are any number of items you could include on a list of Canada’s defence spending failures.

There’s the fact the Canadian Armed Forces has a chronic recruitment problem that has left it short 10,000 personnel and counting.

There’s our minuscule and antiquated submarine fleet – four diesel-powered vessels purchased from the British army in the 1990s. The Victoria-class subs cost billions to keep in service, and their last-century vintage sinks Ottawa’s claim that it can preserve Canada’s sovereignty in the Arctic.

That naval deficit is made worse by Canada’s embarrassing exclusion from the AUKUS military pact, in which three of our biggest allies – the United States, Britain and Australia – will together equip Australia with nuclear-powered submarines to respond to China’s growing aggression in the Pacific.

And no list would be complete without Ottawa’s inability to procure armaments and equipment in a timely manner – a reality illustrated by the long-overdue agreement made earlier this year to purchase 88 F-35 fighter jets. That deal was first announced by former prime minister Stephen Harper in 2010; the F-35s will not be operational until 2029 at the earliest.

Federal budget 2023

This is part of a series on the federal budget to be unveiled on March 28. Check our editorials section for more instalments this week. Other topics include:

Seniors: The growing gap between what Ottawa spends on older and younger Canadians

Child care: Ottawa must follow through on subsidized system

Health care: Ottawa should give provinces more tax room, not a blank cheque

But taking three decades to upgrade a critical air defence capability, and all the other failings listed above, do not represent the worst of it. That honour goes to Ottawa’s refusal to meet its NATO obligation to spend 2 per cent of gross domestic product on defence.

Even as Russia continued to bombard and kill Ukrainian civilians this week, NATO said on Tuesday that Canada’s defence spending will amount to just 1.29 per cent of GDP in fiscal 2022-2023. That’s essentially the same percentage as 2021-2022, when it stood at 1.28 per cent and Russia had only just begun its invasion.

It’s also well below the highwater mark of 1.44 per cent that Canada hit in 2017-2018.

In constant 2015 Canadian dollars adjusted for inflation, Canada is this fiscal year spending less on defence than it did five years ago.

It is frankly astonishing that Russia’s illegal war and China’s increasingly aggressive posture have not pierced the Trudeau government’s isolationist armour.

While allies such as Britain, Germany and Japan (which is not part of NATO) are ramping up their defence spending in response to clear and present threats, and the U.S. continues its pump billions of dollars worth of cash, equipment and weapons into Ukraine, Canada hovers near the bottom of the NATO rankings, beside Slovenia, Spain and Luxembourg.

Over the past four years, the gap between Canada’s actual defence spending, as recorded by NATO, and the amount that would be required to hit 2 per cent of GDP has risen to $21-billion from $17-billion.

That’s a lot of money, but Canada’s $2.86-trillion economy can absorb it. Much smaller NATO economies that don’t have the luxury of naiveté – Poland, Estonia, Lithuania, Latvia – routinely meet and surpass the 2-per-cent benchmark.

Even more damning is the fact that Canada is by far the lowest NATO contributor as a share of GDP among Group of Seven countries.

It comes down to a choice for Ottawa: spend less on some programs so that more can go to defence. That’s what writing a federal budget is all about – prioritizing. And right now, in the world we live in, the Trudeau government patently has its priorities wrong.

Ottawa needs to rapidly increase its defence spending, with the ultimate goal of meeting the NATO threshold. Doing so would put our armed forces on a better standing. More importantly, it would demonstrate that Canada is shoulder to shoulder with NATO in the defence of our values.

Canadian luxury jet maker Bombardier Inc. BBD-B-T +6.42%increase is boosting its financial targets as it sets a new course towards consistent profitability after years of strife.

The Montreal-based manufacturer said Thursday a five-year turnaround strategy launched in March 2021 is yielding results that are either meeting or exceeding its initial plans. Jet sales are holding strong and other revenue streams like servicing planes are helping fuel the bottom line, prompting the company to hike its financial objectives on several key metrics.

Bombardier is now aiming to generate at least US$900-million in annual free cash flow by 2025, up 80 per cent from the US$500-million initially projected. Revenue should top US$9-billion, up 20 per cent from its initial target of US$7.5-billion while adjusted earnings before interest, taxes, depreciation and amortization should hit a minimum of US$1.625-billion, up from the previous US$1.5-billion target, according to the company.

“We are confidently raising the bar,” Bombardier Chief Executive Officer Eric Martel said in a statement released Thursday morning ahead of an exchange with equity analysts for its investor day. “While we are carefully monitoring the current market situation, we know that we have all the ingredients in place to remain a driving force in the industry.”

Mr. Martel took over as Bombardier CEO in the spring of 2020, inheriting a heavily-indebted company still in the throes of crisis as it tried to complete the sale of its train unit to France’s Alstom SA and reinvent itself as a single-business manufacturer of private jets. At the time, its share price had fallen to lows not seen in a quarter century and its business prospects were clouded by the fallout from the Covid-19 pandemic.

The CEO and chief financial officer Bart Demosky hatched a blueprint for recovery that hinged on cementing its share of new aircraft sales, cutting costs, paying down debt, and dramatically increasing its aircraft repair and service capability. They’re also building out Bombardier’s defense business, and now see that unit being able to triple its revenue to more than US$1-billion in the second half of the decade.

Bombardier’s top executives set initial financial goals that some investors have labelled overly conservative and therefore easier to achieve. But there’s no doubt their plan has put the manufacturer on firmer footing.

The company, controlled by its founding Bombardier-Beaudoin family through a special class of super-voting shares, more than quadrupled its profitability on an adjusted EBITDA basis between 2020 and 2022 while growing revenues 23 per cent. Including this year’s transactions, the corporation has reduced its debt by $4.5-billion over the past three years, earning credit rating upgrades from Moody’s Investors Service and Standard & Poor’s.

Bombardier announced two years ago that it would narrow its manufacturing to bigger and pricier jets such as the US$75-million Global 7500 and end production of the smaller-cabin Learjet models. That decision is now paying dividends because the high net-worth customers buying those planes are less affected by inflation and regional economic slowdowns than those with lesser means.

The corporation also benefitted from a surge toward private plane travel during the COVID-19 pandemic, seeing strong sales to individuals and fleet operators as more people chose to avoid the airport chaos and flight schedule disruption that became common in commercial air travel. It now has a backlog of orders worth two years of work.

Walter Spracklin, an analyst at RBC Capital Markets, says the pandemic has “structurally increased demand” for private jets and private travel among wealthy individuals. Data from business aviation intelligence firm WingX shows business jet activity as measured by flights is down 3 per cent this year through March 13 compared to the same period last year but 16 per cent ahead of 2019.

Still, it remains to be seen whether the changing fortunes of Bombardier’s billionaire clients will affect demand. Soaring equity markets and rising valuations of everything from mansions to cryptocurrencies to commodities boosted the collective fortune of the world’s 500 richest people by more than US$1-trillion in 2021, according to Bloomberg data. Last year, the ultra-wealthy saw US$1.4-trillion erased from their net worth.

“March 2022 was the record peak in business aviation activity, reflecting the pent-up demand as the pandemic faded and lockdowns were released, so it’s not a great surprise to see lower year-over-year activity,” WingX said in its latest weekly bulletin. “However, with emerging concerns of another global financial crisis, we may well see further softening in business jet usage in the next few months.”

Bombardier faces pressure on other fronts.

Two bondholders previously locked in a dispute with the manufacturer over its move to sell the train business and other assets are now suing the company. They say the decision violates the terms of debt covenants on a US$250-million debenture maturing in 2034 and deprives them of basic credit support for their investment that came from a diversified transportation business.

In a claim filed with the New York Supreme Court, Antara Capital Master Fund and Corbin Opportunity Fund are demanding relief and damages over alleged breach of contract. They say the covenant stipulates that Bombardier cannot dispose of “the whole or substantially the whole” of its assets for the 30-year term of the debt, and argue that Bombardier’s move to sell US$260-million worth of new 2034 bonds through private placement to Canso Investment Counsel Ltd. in May 2021 diluted the dissenting bondholders and was illegal.

Bombardier says the allegations are without merit and that it has never been in breach of any covenant under the relevant indenture. When the bondholder issues first surfaced in 2021, Mr. Martel characterized them as “a little bump in the road” that would not distract management from its effort to turn the company around. More recently, he said he remains confident that Bombardier it will win the legal battle but says a resolution could take years.

LondonCNN — 

The Bank of England is expected to hike rates by a quarter of a percentage point Thursday following an unexpected jump in inflation.

UK consumer prices surged by 10.4% in February compared with a year ago, the first acceleration in inflation in four months, as food prices soared and the cost of visiting restaurants and hotels increased.

The surprise uptick in inflation increases the likelihood that the central bank will raise rates for the 11th consecutive time, despite turmoil in the banking sector and concerns about weak economic growth in the United Kingdom.

Other major central banks are continuing to raise borrowing costs. The US Federal Reserve hiked rates by a quarter of a percentage point Wednesday. The European Central Bank increased its rates by half a point last week — even as markets were being roiled by the banking crisis — and the Swiss National Bank followed with a hike of the same magnitude earlier Thursday.

UK inflation rises to 10.4% as food prices soar

“There had been hopes that inflation could have retreated from its double-digit heights, but the lurch upwards… is likely to refocus minds on the need to dampen down demand further and rein in the price spiral,” Susannah Streeter, head of money and markets at broker Hargreaves Lansdown, wrote in a note Thursday.

The Bank of England’s job is made more difficult by the fact that the UK economy is expected to shrink this year, because higher interest rates constrain consumer demand and business investment. Turmoil in the banking sector, which is expected to cause banks to further tighten lending criteria, could depress growth even further.

https://edition.cnn.com/2023/03/23/economy/uk-interest-rates-hike/index.html

The federal government is set to carve out a bigger role for itself in electricity policy – an area of mostly provincial responsibility, but one that Ottawa has identified as pivotal to national economic interests as Canada competes for low-carbon investment.

New spending commitments to help modernize and expand the capacity of the country’s power grids will be a major component of a federal budget aimed at keeping pace with massive clean-energy investment in the United States, according to government sources.

Policy levers that the government has been considering, the sources say, include some combination of tax credits, grants, financing mechanisms and the pursuit of joint funding agreements with provinces. There is growing recognition that grid investment is currently nowhere near what is needed to meet electricity demand that is expected to at least double as electricity is increasingly used to fuel transportation, heat buildings and power industry.

• These are Canada’s electric vehicle hot spots

U.S. crude oil stockpiles rose unexpectedly last week to their highest in nearly two years, while gasoline and distillate inventories fell, the Energy Information Administration said on Wednesday.

Crude inventories rose by 1.1 million barrels in the week to March 17 to 481.2 million barrels, their highest since May 2021. Analysts in a Reuters poll had expected a 1.6 million-barrel drop.

Oil inventories have mostly built since mid-December, the data showed.

“(The build) is obviously a concern for the bulls here,” said Bob Yawger, director of energy futures at Mizuho. “We just have a lot of crude oil in storage and it’s not going to go away any time soon as it looks like we keep on posting builds.”

Oil futures turned positive after the data. Brent crude futures and U.S. crude futures last traded up about 0.8 per cent to $75.93 a barrel and $70.25 a barrel, respectively.

Inventories on the East Coast, however, fell to 6.53 million barrels, the lowest on record, despite refinery utilization in the region falling to the lowest since February 2021, the data showed.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.1 million barrels last week, the EIA said.

Refinery crude runs fell by 22,000 barrels per day (bpd) and refinery utilization rates rose by 0.4 percentage point in the week.

Gasoline stocks fell by 6.4 million barrels to 229.6 million barrels, the EIA said, compared with analysts’ expectations for a 1.7 million-barrel drop.

Distillate stockpiles, which include diesel and heating oil, fell by 3.3 million barrels in the week to 116.4 million barrels, versus expectations for a 1.5 million-barrel drop, the data showed.

Net U.S. crude imports rose last week by 51,000 bpd, the EIA said.

The biggest oil traders and energy hedge funds speaking at the FT Commodities Global Summit struck a bullish tone despite banking jitters, and see a jump in oil prices by the year end.

Pierre Andurand, founder of hedgefund Andurand Capital, was the most bullish and saw a potential Brent oil price of $140 a barrel by the end of the year.

He said the current oil price downturn was speculative and not based on fundamentals.

Oil prices rose for a second day on Tuesday after slumping to 15-month lows as a crisis at Switzerland’s second-biggest bank Credit Suisse, which followed the collapse of two U.S. lenders, led to a takeover by bigger Swiss rival UBS.

Brent crude traded at just below $75 a barrel by 1619 GMT.

Trafigura’s co-head of oil trading, Ben Luckock, expects oil to be in the $80s a barrel by the summer but emphasised long-term volatility owing to uncertainty over investments in new projects to meet new oil demand and counter declining oilfields.

“No one is doing 15-year (projects in) deep water fields off Angola anymore,” Luckock said.

Similarly, the commodities heads at hedgefund Citadel and at Goldman Sachs said capital available for energy or commodity investments would be tight, lending further support to oil prices.

The CEO of energy trader Mercuria pointed to uncertainty in demand growth forecasts impacting oil investments.

“If you have this level of unpredictability (in peak demand) then you lower investments then it’ll push oil to the upside,” Mercuria’s Marco Dunand said.

Gunvor CEO Torbjorn Tornqvist said he expected oil prices to move higher towards the end of the year as rising Chinese demand tightens oil balances further. But he added that he wasn’t seeing oil demand growth coming from elsewhere.

The commodities trader’s co-head of trading Stephane Degenne did not expect to see oil go above $100 a barrel at the year end.

In its latest monthly report, the International Energy Agency said it expected China to account for about half of the 2 million barrel per day oil demand growth it forecast for 2023 as the world’s biggest oil importer continues to ease its COVID-19 restrictions.

The Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs amid recent turmoil in financial markets spurred by the collapse of two U.S. banks.

The move set the U.S. central bank’s benchmark overnight interest rate in the 4.75-5 per cent range, with updated projections showing 10 of 18 Fed policymakers still expect rates to rise another quarter of a percentage point by the end of this year, the same endpoint seen in the December projections.

But in a key shift driven by the sudden failures this month of Silicon Valley Bank (SVB) and Signature Bank, the Fed’s latest policy statement no longer says that “ongoing increases” in rates will likely be appropriate. That language had been in every policy statement since the March 16, 2022 decision to start the rate hiking cycle.

Instead, the policy-setting Federal Open Market Committee said only that “some additional policy firming may be appropriate,” leaving open the chance that one more quarter-of-a-percentage-point rate increase, perhaps at the Fed’s next meeting, would represent at least an initial stopping point for the rate hikes.

Though the policy statement said the U.S. banking system is “sound and resilient,” it also noted that recent stress in the banking sector is “likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation.”

There were no dissents on the policy decision.

The document made no presumption that the battle with inflation has been won. The new statement dropped language saying that inflation “has eased” and replaced it with the declaration that inflation “remains elevated.”

Job gains are “robust,” according to the Fed.

Officials projected the unemployment rate to end the year at 4.5 per cent, slightly below the 4.6 per cent seen as of December, while the outlook for economic growth fell slightly to 0.4 per cent from 0.5 per cent in the previous projections. Inflation is now seen ending the year at 3.3 per cent, compared to 3.1 per cent in the last projections.

The outcome of the two-day meeting this week marks an abrupt repositioning of the central bank’s strategy from just two weeks ago, when Fed Chair Jerome Powell testified in Congress that hotter-than-expected inflation would likely force the central bank to raise interest rates higher and possibly faster than expected.

The March 10 collapse of California-based SVB and the subsequent collapse of New York-based Signature Bank highlighted broader concerns about the health of the banking sector, and raised the possibility that further Fed rate increases might tip the economy towards a financial crisis.

Powell is scheduled to hold a news conference at 2:30 p.m. EDT (1830 GMT) to elaborate on the policy decision and the Fed’s views on recent events.

Wall Street closed sharply higher on Tuesday as widespread fears over liquidity in the banking sector abated and market participants eyed the Federal Reserve, which is expected to conclude its two-day policy meeting on Wednesday with a 25-basis-point hike to its policy rate.

All three major U.S. stock indexes were bright green as the session closed, with energy, consumer discretionary and financials enjoying the most sizable gains.

Canada’s benchmark stock index also rose, closing at its highest level in a week, helped by gains in energy and financial shares after domestic data showed consumer prices easing more than expected in February.

A one-two punch of regional bank failures last week, followed by the rescue of First Republic Bank and the takeover of Credit Suisse, sparked a rout in banking stocks and fueled worries of contagion in the financial sector which, in turn, heightened global anxieties over the growing possibility of recession.

But banking stocks bounced back on Tuesday, building on Monday’s reversal. Still, despite its recent resurgence, the S&P Banks index has lost more than 18% of its value just this month.

Both the SPXBK and the KBW Regional Banking index jumped 3.6% and 4.8%, respectively, their biggest one-day percentage jumps since late last year.

“The stock market is coming to a recognition that the banking crisis wasn’t a crisis after all, and was isolated to a handful of banks,” said Oliver Pursche, senior vice president at Wealthspire Advisors in New York. “Both the public and the private sector have shown they are more than able to backstop and shore up weak institutions.”

Treasury Secretary Janet Yellen, in prepared remarks before the American Bankers Association, said the U.S. banking system has stabilized due to decisive actions from regulators, but warned more action might be required.

Attention now shifts to the Fed, which has gathered for its two-day monetary policy meeting, at which the members of the Federal Open Markets Committee (FOMC) will revisit their economic projections and, in all likelihood, implement another increase to the Fed funds target rate in their ongoing battle against inflation.

“The Fed will raise interest rates by 25 basis points and the market won’t care,” Pursche added. “It will all be about (Chairman Jerome) Powell’s statement on the economy and inflation, and if he can do a good enough job convincing the public that the banking noise” can be attributed to bad management on the part of a few banks.

Financial markets have now priced in an 83.4% likelihood of a 25 basis-point rate hike, and a 16.6% probability that the central bank will leave its policy rate unchanged, according to CME’s FedWatch tool.

Economic data released early in the session showed a 14.5% jump in U.S. existing home sales, blasting past expectations and snapping a 12-month losing streak.

Treasury yields gained, as improving risk sentiment reduced safe-haven demand for U.S. debt before the Federal Reserve concludes its two-day meeting on Wednesday.

Interest rate-sensitive U.S. two-year yields rose to 4.177% and are also up from a six-month low of 3.635% on Monday, but are sharply below the almost 16-year high of 5.084% hit on March 8.

The closely watched yield curve between U.S. two-year and 10-year notes remains deeply inverted at minus 58 basis points, a level that still indicates a looming recession, though it remains off its extreme levels of minus 111 basis points reached on March 8.

Canada’s annual inflation rate slowed more than expected in February to 5.2%, its lowest level in 13 months, backing up the Bank of Canada’s plans to hold off on further interest rates hikes.

Despite the tamer than anticipated inflation numbers, Canada’s 2-year bond yield was up more than 10 basis points in late afternoon trading – although the rise was more muted than the move in the equivalent U.S. yield.

Credit markets are continuing to bet an interest rate cut at the Bank of Canada is only months away. While they are currently pricing in only about a 12% chance of a cut next month, they are positioned for at least a quarter-point cut this summer, according to Refinitiv Eikon data late Tuesday.

The Dow Jones Industrial Average rose 316.02 points, or 0.98%, to 32,560.6, the S&P 500 gained 51.3 points, or 1.30%, to 4,002.87 and the Nasdaq Composite added 184.57 points, or 1.58%, to 11,860.11.

Eight of the 11 major sectors in the S&P 500 ended the session in positive territory, with energy stocks, boosted by rising crude prices, posting the largest percentage gains.

Shares of First Republic Bank soared by 29.5%, the company’s biggest-ever one-day percentage jump as JPMorgan CEO Jamie Dimon leads talks with other big banks aimed at investing in the lender, according to the Wall Street Journal.

Peers PacWest Bancorp and Western Alliance Bancorp also surged, leaping 18.8% and 15.0%, respectively.

Tesla Inc advanced 7.8% after the electric automaker appeared on track to report one of its best quarters in China, according to car registration data.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 135.49 points, or 0.7%, at 19,654.92.

Heavily-weighted financials in Toronto rose 1.2%, while energy added 3.2% as the price of oil settled 2.5% higher at $69.33 a barrel.

Advancing issues outnumbered declining ones on the NYSE by a 3.22-to-1 ratio; on Nasdaq, a 2.73-to-1 ratio favored advancers. The S&P 500 posted 5 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 48 new highs and 114 new lows. Volume on U.S. exchanges was 11.75 billion shares, compared with the 12.63 billion average over the last 20 trading days.

Canada’s annual inflation rate fell to 5.2 per cent in February, the biggest drop since the early stages of the pandemic, although grocery prices are still climbing by more than 10 per cent.

Financial analysts had been expecting an inflation rate of 5.4 per cent in Tuesday’s report from Statistics Canada. Inflation cooled from a 5.9-per-cent increase in the Consumer Price Index (CPI) in January. The slowdown was the largest since April, 2020.

Inflation is expected to cool further in the coming months. The Bank of Canada projects the annual rate of CPI growth will ebb to around 3 per cent by the middle of the year, then return to its 2-per-cent target by late 2024.

Financial analysts widely expect the central bank to hold its benchmark interest rate at 4.5 per cent in next month’s rate decision, on account of how inflationary pressures are waning.

The recent decline in the annual inflation rate is largely because the initial effects of Russia’s invasion of Ukraine – which led to spiking prices of commodities, such as crude oil and wheat – are no longer part of the year-over-year calculation of inflation, given the length of the war. This is known as a base effect.

Even so, short-term changes in prices have dampened. On a monthly basis, the CPI rose 0.1 per cent in February, after adjustments for seasonality, compared with a 0.3-per-cent gain in January.

There were, however, signs of stickiness. Excluding food and energy, core CPI was up 4.8 per cent on an annual basis in February, down slightly from a 4.9-per-cent gain in January

The Bank of Canada and other central banks are being tested by inflation that remains too high, but also by distress in the financial system, after the collapse of Silicon Valley Bank and the emergency takeover of Credit Suisse.

Unlike many of its peers, the Bank of Canada had already moved to the sidelines, putting a “conditional pause” on further increases to its benchmark interest rate. Inflation appears to be cooling more rapidly in Canada than in the United States and Britain.

“With inflation subsiding on both the headline and core measures, the Bank of Canada is in a less awkward position than many others during the recent financial turmoil. That is, there’s really no underlying reason for the Bank to hike further,” Bank of Montreal chief economist Doug Porter said in a note to clients.

“Over all, the Bank’s pause looks prudent, and we expect them to stay at current levels for quite some time, barring a major flare-up in the banking turmoil,” Mr. Porter added.

A noteworthy aspect of Statscan’s report is that the annual inflation rate was weaker than growth in average hourly wages, which rose 5.4 per cent in February from the previous year. It was the first time this measure of wage growth had exceeded inflation in two years. The average Canadian has experienced an erosion of purchasing power over this inflation crisis.

Gasoline has been a big contributor to slowing inflation. Prices at the pump fell nearly 5 per cent in February from a year earlier – the first annual drop since the outset of 2021.

There were other notable areas of decline. Child-care costs fell by 27.5 per cent on an annual basis as the national child-care deal led to a sharp reduction in fees.

Grocery prices rose 10.6 per cent on a 12-month basis in February. While that was improved from January’s pace of 11.4 per cent, it was the seventh consecutive month of double-digit increases.

“Continuing to put upward pressure on grocery prices are supply constraints amid unfavorable weather in growing regions, as well as higher input costs such as animal feed, energy and packaging materials,” Statscan said in its report.

The housing sector has been on a rollicking ride. Over all, shelter costs rose 6.1 per cent in February on a 12-month basis – better than 6.6 per cent in January. However, mortgage interest costs surged by nearly 24 per cent, the fastest pace since 1982.

In recent months, economists have looked to short-term trends in inflation for a sense of how the situation is changing. Expressed at an annualized rate, the three-month change in core CPI (excluding food and energy) was 3.4 per cent in February, up from 3.1 per cent in January – and just outside the Bank of Canada’s target range of 1 per cent to 3 per cent.

The central bank will make its next rate decision on April 12. Bank officials have said they would only resume hiking interest rates if they see an “accumulation of evidence” that consumer price growth is not easing as expected.

In response to the CPI report, financial analysts said the Bank of Canada is likely to stick with its pause.

“There was nothing in [Tuesday’s] inflation report that would move the Bank of Canada off of its pause on interest rate moves,” said Leslie Preston, senior economist at Toronto-Dominion Bank, in a note to investors. “Unlike the [U.S.] Federal Reserve, domestic inflation trends mean the BoC can ride out the current volatility in financial markets driven by stresses in the banking sector internationally.”