Everything You Need to Know on Thursday: Bank of Canada Officials Split on Rate Cut Timing

Good morning mooers! Here are things you need to know about today's market:

● S&P/TSX 60 Index Standard Futures are trading at 1,314.50, down 0.14%.

● Bank of Canada officials split on rate cut timing

● Canada's retail sales flatlined in the first quarter of 2024

● US crude oil stocks fall by 6.4 million barrels from previous week, EIA reports

● Stocks to watch: Teck Resources

Today, the Canadian dollar is trading at 73.16 cents US, a slight increase from Wednesday.

The S&P/TSX 60 Index Standard Futures (SXF) are currently trading at 1,314.50, which is down 0.14% from the previous close.

Members of the Bank of Canada's governing council were split on how long the central bank should wait before it starts cutting interest rates when they met earlier this month.

The central bank released its summary of deliberations detailing the governing council's discussions ahead of its decision to hold interest rates steady on April 10.

Some members felt the central bank should take its time before lowering rates, the summary said, given the Canadian economy's strong performance as well as ongoing inflationary risks.

"Some members emphasized that, with the economy performing well, the risk had diminished that restrictive monetary policy would slow the economy more than necessary to return inflation to target," the summary said. "Others placed more emphasis on the progress made in bringing inflation down."

Despite those differences, the summary notes the governing council agreed to hold the key interest rate at five per cent for now and that when they come, rate cuts won't happen all at once.

"While there was a diversity of views about when conditions would likely warrant cutting the policy rate, they agreed that monetary policy easing would probably be gradual, given risks to the outlook and the slow path for returning inflation to target," the summary said.

Economists widely expect the Bank of Canada to begin lowering its policy rate in June or July.

Canadian consumers haven’t tightened their belts this much in nearly a year, and there are no signs of spending growth since the start of 2024.

Receipts for retailers were unchanged in March, according to an advance estimate from Statistics Canada released Wednesday. That followed a 0.1 per cent drop in February, missing expectations for a 0.1 per cent gain in a Bloomberg survey.

Taken together with the 0.3 per cent plunge in January sales, the figures point to a flat reading in the first three months of the year, the weakest pace since the second quarter of 2023.

After the release, yields on two-year Canadian government bonds fell about three basis points to 4.25 per cent, while the loonie weakened about 0.3 per cent to $1.372 per U.S. dollar as of 9:08 a.m. Ottawa time.

US crude oil inventories fell by 6.4 million barrels to 453.6 million barrels in the week ended April 19, the U.S. Energy Information Administration said in its weekly petroleum report released on Wednesday.

Crude oil production held steady week over week at 13.1 million barrels per day (b/d), the EIA said. Crude oil imports fell by 51,000 b/d to 6.5 million b/d, while crude oil exports grew 250,000 b/d to 4.2 million b/d.

Total gasoline stocks decreased by 700,000 barrels to 226.7 million barrels. Meanwhile, distillate stocks rose by 1.6 million barrels to 116.6 million barrels.

Brent crude edged 0.5% higher to US$88.47 per barrel and West Texas Intermediate crude gained 0.5% to US$83.23 per barrel at last look early on Thursday.

The Vancouver-based mining company says it earned a profit attributable to shareholders of $343 million or 65 cents per diluted share for the quarter ended March 31. The result compared with a profit of $1.14 billion or $2.18 per diluted share in the same quarter last year.

Revenue totalled $3.99 billion, up from $3.79 billion in the first quarter of 2023.

On an adjusted basis, Teck says it earned 75 cents per diluted share from continuing operations, down from $1.78 per diluted share a year earlier.

Teck closed the sale of a minority stake in its steelmaking coal business, Elk Valley Resources, to Japan's Nippon Steel Corp. and South Korean steelmaker Posco in January.

The deals are part of a broader plan that will see Glencore acquire the remaining 77 per cent stake in Elk Valley Resources. The Glencore transaction remains subject to regulatory review and is expected to close later this year.

Source: BNN Bloomberg, Financial Post, MT Newswire