It didn’t take long for traders to start bidding the dollar back up after the Bank of Canada attempted to talk down the currency. The loonie tumbled yesterday after Bank of Canada Deputy Governor Timothy Lane warned the central bank is “paying close attention” to how the economy copes with higher rates and a stronger dollar. This morning, with the loonie trading up one-fifth of a cent, we’ll evaluate how Bay Street is coping with the Bank of Canada’s cautionary comments.

AIR CANADA LAUNCHES SEARCH FOR LOYALTY PARTNER

Air Canada today took another step in its split from Aimia. The carrier is launching a Request for Proposals from “key” financial institutions interested in partnering up on a co-branded credit card. We’ll gather insight on prospective frontrunners, and also sift through the other news coming out of Air Canada’s investor day meeting.

LIBERALS’ FISCAL CHECK

The Finance Department officially closes the books on the 2016-17 fiscal year today with the release of its annual financial report. At the time of the spring budget, the government anticipated a $23-billion shortfall this year. And let's not forget the government's long-term projections anticipate deficits into the 2050s.

TOYS "R" US BANKRUPTCY FILING

Toys "R" Us has succumbed to the pressure of shifting consumer habits and a hefty debt load. The retailer filed for Chapter 11 in the U.S., and is also seeking protection from creditors under CCAA in Canada. The company said its 1,600 stores will operate as usual, but The Wall Street Journal is reporting some of them will be closed. The big questions now are whether customers will be turned off by the negative headlines and whether vendors will stay on side.

MONTREAL BECOMES 'UNEXPECTED BRIGHT LIGHT' IN REAL ESTATE

Sotheby's International Realty Canada has released its latest assessment of luxury home sales and Canada, and it's pegging Montreal as a standout amid volatility in Toronto and Vancouver. Sotheby's says sales of homes priced at $1 million or more surged 60 per cent year-over-year in Montreal during July and August. "Montreal, in particular, is emerging as an unexpected bright light in Canada's luxury real estate horizon," CEO Brad Henderson said in a press release. Probably a good time to refresh our collective memory on what Quebec Finance Minister Carlos Leitao said about the prospect of a tax on foreign buyers last time we spoke with him. 

FED MEETING BEGINS

The U.S. Federal Reserve starts its two-day meeting today, with investors seeing virtually no chance of a change to the benchmark interest rate when the central bank’s decision is announced tomorrow at 1400 ET. Instead, the anticipation surrounds the Fed’s plan for unwinding the US$4.5-trillion balance sheet that helped cushion the blow from the financial crisis. Recall the Fed said in June it expected to begin that process this year “provided that the economy evolves broadly as anticipated.” Here, by the way, is the latest detailed report on the balance sheet: https://www.federalreserve.gov/releases/h41/current/h41.htm

OTHER NOTABLE STORIES:

-The Globe and Mail is reporting Cenovus is nearing a deal to sell its Suffield assets for as much as $600 million. The buyer is said to be Torxen Resources, which is run by ex-Cenovus COO John Brannan.

NOTABLE RELEASES/EVENTS

-Notable earnings: Gluskin Sheff, FedEx

-Notable data: Canadian manufacturing sales (0830), U.S. housing starts (0830)

-8:00 a.m. ET: Air Canada hosts investor day meeting in Toronto

-8:30 a.m. ET: Finance Department releases 2016-17 financial report

-9:45 a.m. ET: Justin Trudeau holds media avail in Ottawa

-10:30 a.m. ET: Donald Trump delivers remarks at United Nations General Assembly

-11:30 a.m. ET: Conservative Leader Andrew Scheer makes announcement in Ottawa on Liberals’ tax plan

-1:00 p.m. ET: Best Buy holds investor day meeting

-10:00 p.m. ET: Trudeau to be honoured at Atlantic Council Global Citizen Awards Gala in New York

-U.S. Federal Reserve starts two-day meeting

Every morning BNN's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN's editorial staff listing the stories and events that will be in the spotlight that day.  Have it delivered to your inbox before the trading day begins by heading to www.bnn.ca/subscribe.