One of Canada’s most powerful bankers is shrugging off the Great White Short trade. “We’ll see how the performance of those shorts work out over time,” TD CEO Bharat Masrani told Greg in our exclusive interview when asked about the skeptics who say Canada’s banks are bound to stumble. Masrani pointed to Canada’s recent economic strength, with a shoutout to policymakers who helped take some of the heat out of regional housing markets. “I think Canada has done a fantastic job in introducing [housing policy moves] in an orderly fashion,” he said. Watch for highlights from that interview on BNN today.

BETS ON THE BANK OF CANADA

The Canadian dollar keeps building on its gains after yesterday’s blowout GDP report. The loonie reached a high of 80.32 cents U.S. today as the second-quarter growth surge fuels anticipation for the Bank of Canada’s next rate decision. CIBC wasted little time yesterday moving up its call for a rate bump to next week’s meeting. Scotia also joined that camp late yesterday, warning the recent “emerging-markets style of growth” could ultimately do harm if it persists. Overall, implied probability of the Bank raising by 25 basis points next week is hovering around 44 per cent. 

 

NAFTA 2.0, ROUND TWO

NAFTA renegotiations resume today in Mexico City. Since the last round, we've seen U.S. President Donald Trump ramp up the rhetoric, with repeated warnings/threats/hints that he's prepared to pull the States out of the trade deal. Mexico's foreign minister indicated earlier this week that his country wouldn't even bother sticking around at the negotiating table if Trump serves notice. And, late yesterday, a White House readout after Trump spoke with Justin Trudeau by phone says the two leaders “stressed their hope to reach an agreement by the end of this year.” Meanwhile, The Globe is reporting the “prevailing view in Ottawa” is that Canada could benefit from letting the talks drag on. We'll get updates from the discussions today with CTV's Richard Madan. 

DISAPPOINTMENT FOR U.S. LABOUR MARKET 

Bit of a disappointment this morning from the U.S. labour market. The stateside economy added 156,000 jobs last month. That's less than anticipated, and also a slowdown from July when 189,000 positions were created (that month's data was revised lower today). Meanwhile, unemployment rose to 4.4% and average hourly earnings came in slightly below estimates. The U.S. dollar slipped on the news, and that makes the Canadian dollar look better – with the loonie topping 81 cents U.S. for the first time since the middle of 2015. 

HARVEY FALLOUT

We continue to track the catastrophic flooding in Texas and the domino effect across the energy industry. Gas price expert Dan McTeague tweeted last night that he’s expecting pump prices to rise five cents/litre today in Toronto and Ottawa, then by another 9 cents tomorrow. He’s also expecting prices to rise a total of six cents in Vancouver by tomorrow. We’ll turn to our CTV colleagues for updates from Houston today.

OTHER NOTABLE STORIES:

-Lululemon is trading about five per cent  higher in the pre-market after second-quarter profit and revenue beat expectations. Without fail, it seems this company’s quarterly results lead to outsized stock volatility.

-Today could be an important day for the toy retail industry . It’s so-called Force Friday II, with another batch of Star Wars toys hitting the shelves.

NOTABLE RELEASES/EVENTS

-Notable earnings: BRP

-Notable data: U.S. non-farm payrolls (8:30 a.m. ET. Estimate: +180k jobs, 4.3 per cent unemployment), ISM U.S. manufacturing index (10:00 a.m. ET), U.S. consumer sentiment (10:00 a.m. ET)

-3:15 p.m. ET: Justin Trudeau holds media avail in Saskatoon

-Second round of NAFTA renegotiations begins in Mexico City (runs to Sept. 5)

-Automakers to report monthly sales

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.