The Daily Chase: Decision day at the Bank of Canada

Here are five things you need to know this morning.

Will they or won’t they? It’s decision day at the Bank of Canada, as the central bank will announce its latest interest rate decision at 9:45 a.m. eastern time this morning. After the bank raised its rate to its current level of five per cent last summer, we spent much of the past year wondering about the timing of rate cuts, despite the bank’s protestations that more hikes were on the table all along. Economists and investors in the swaps market seem to be in broad agreement that today could be the day for the first rate cut since the early days of the pandemic, although it’s far from certain. Stuart Paul, an economist with Bloomberg Economics, told BNN Bloomberg’s The Street this morning that there’s plenty of justification for the bank to stand pat should it decide to, with recent readings showing “pretty robust demand” in the economy, including a surprising 90,000 new jobs added in April. “I think a cautious Bank of Canada would choose to wait at least until July,” he said. The bank will then have the benefit of two more months’ worth of jobs, CPI, retail sales and GDP reports to chew over. Cutting today “seems to be the less prudent approach,” according to Paul, but it’s very much on the table — and if not, then July is pretty much a lock. We’ll know one way or the other at 9:45 this morning and BNN Bloomberg will have extensive coverage throughout the day.

Toronto housing market shows prices slump and sales keep sliding: One part of the economy that would very much benefit from a rate cut would be the housing market in Canada’s biggest city, where new numbers released this morning show selling prices in Toronto inching lower, and the volume of sales continuing to slide. The local real estate board said this morning that the seasonally adjusted benchmark selling price of a home slipped to $1.08 million in May. That’s down by 0.4 per cent from April and down by 3.5 per cent in the past year. The number of sales fell for the fourth month in a row, and new listings crept higher. Nearly 22,000 homes are currently for sale across the GTA. That’s up by 83 per cent from last year. More than half of those listings came in May alone.

GFL hires bankers to explore two buyout offers, report says: Shares in TSX-listed waste management firm GFL Environmental Inc. are moving higher after a report in the Globe & Mail yesterday that the company has hired bankers to review two offers to buy out all or part of the company. According to the report, a consortium of sovereign wealth and infrastructure funds have discussed joining forces to buy the company outright, and in a separate offer, a buyer has emerged for just the company’s environmental services division. The company has declined to comment, but investors seem convinced that where there is smoke there’s fire, as the shares have risen for each of the past two days, and are now up about 20 per cent from where they were trading late in the day on Friday.