The Bank of Canada is almost universally expected to keep its benchmark rate unchanged at 10 a.m. ET, when it will also release a new monetary policy report that’ll offer up a detailed analysis of the outlook for the Canadian economy. The elephant in the room will be uncertainty about spillover from the U.S. as President-elect Donald Trump prepares to take office. Governor Stephen Poloz will also have to weigh the impact of the suddenly resurgent loonie, and risks at home like mounting household debt levels.  

While the implied probability of a hold is 98.5 per cent, Poloz has already demonstrated he’s not afraid to surprise the markets. One shop that wouldn’t be shocked by a cut is BNP Paribas. Its head of North American FX strategy told us yesterday his colleagues reckon there’s a chance of “preemptive” easing as the BoC aims to ward off a run-up in rates thanks to spillover from the States. Greg Bonnell is on the ground in Ottawa to break the news for us and will have a seat in the room when Poloz addresses the media at 11:15 a.m. ET. 

And here’s what the economy has spewed out since the Bank’s last decision on December 7:

 

CAMECO WARNS

It was a kitchen sink-style announcement from Cameco late yesterday. Adjusted full-year earnings “will be significantly lower” than analyst estimates (of which the average is currently 73 cents). Also, the company is cutting 10 per cent of jobs at three of its mines. Also, it's changing its employee air commuter service and work schedules to wrench out more savings. Also, it says production will drop approximately10 per cent at Inkai this year. All that’s enough to arrest the recent surge that lifted the stock 74 per cent from its Nov. 1 low. Cameco’s U.S. listing is trading about 7 per cent lower in pre-market trading. Worth pointing out that of the 13 analysts who cover Cameco, there are 10 buys and three holds. Business Day AM is chasing this.

CANDIDATE O’LEARY

Kevin O’Leary has officially entered the Conservative Party of Canada’s already-crowded leadership race. We’ll ask about his economic, fiscal and regulatory policies when we speak with him during the noon hour on The Business News.   

ROSS SAID TO SEND CANADA SIGNALS ON NAFTA’S FUTURE

The Globe and Mail is reporting Wilbur Ross has notified Canada that rules of origin and dispute tribunals will be targeted in NAFTA renegotiations. Consistent with what Ross previously told BNN, The Globe says Canada has also been informed by Trump’s team that their main concern is Mexico. See the full report here, and note that Ross has his confirmation hearing today. 

RELEASES/EVENTS:

- Notable earnings: CP Rail (after the bell; conference call at 4:30 p.m. ET), TD Ameritrade, Citigroup, Goldman Sachs, Netflix

- Notable data: StatsCan EI claims report (8:30 a.m. ET), U.S. CPI (8:30 a.m. ET), U.S. industrial production (9:15 a.m. ET)

- 10 a.m. ET: Bank of Canada releases rate decision and monetary policy report

- 10 a.m. ET: Justin Trudeau holds media availability in Sherbrooke, QC

- 10 a.m. ET: Minneapolis Fed President Neel Kashkari delivers speech in Minneapolis

- 10 a.m. ET: Confirmation hearing for U.S. Commerce Secretary Nominee Wilbur Ross

- 10 a.m. ET: Confirmation hearing for U.S. EPA Administrator Nominee Scott Pruitt

- 11:15 a.m. ET: BoC Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins address the media

- 1 p.m. ET: Conservative Party Leadership Candidate Maxime Bernier delivers speech on his foreign policy plan in Ottawa

- 2 p.m. ET: U.S. Federal Reserve releases Beige Book

- 2 p.m. ET: Calgary Chamber hosts Energy Future luncheon featuring Eurasia Group CEO Robert Johnson and Arc Financial Chief Energy Economist Peter Tertzakian

- 2:15 p.m. ET: Barack Obama delivers final news conference as president

- 3 p.m. ET: U.S. Federal Reserve Chair Janet Yellen delivers speech in San Francisco

- World Economic Forum continues in Davos. Notable sessions: Lawrence Summers and Christine Lagarde on panel re. middle class at 3 a.m. ET; Bill Morneau on panel re. aging population at 6:30 a.m. ET.