The Daily Chase: Markets brush off Russia sanctions; Low expectations for bank earnings season

Global oil prices are trading in the red this morning as yesterday’s knee-jerk reaction to Russia’s stoking of geopolitical tension fades.

Global oil prices are trading in the red this morning as yesterday’s knee-jerk reaction to Russia’s stoking of geopolitical tension fades. Canada joined the parade of sanctioning nations yesterday, announces curbs on Russia that more or less echoed what the U.S. announced earlier in the day, including “prohibitions on direct and indirect dealings in Russian sovereign debt.” But as Bloomberg’s Vince Cignarella pointed out late yesterday afternoon, it’s unclear how impactful that type of move will be since, as he put it, “there’s confusion” about who actually holds Russian debt.

We’ll also dig deeper into the TSX-listed companies that have something at stake. Kinross Gold, for instance, put out a release this morning stating that it’s unaffected by the U.S. sanctions. The miner said 13 per cent of its total production will come from Russia this year (and pointed out its assets in that country are 7,000 kilometers away from Ukraine).

BANK EARNINGS EVE

Royal Bank of Canada will launch fiscal first-quarter reporting season for the Big Six tomorrow morning, and we’ve got another analyst attempting to manage his clients expectations. “Lots to look forward to…just not this quarter,” reads the headline on the preview note that Gabriel Dechaine at National Bank of Canada Financial Markets sent clients late yesterday. He’s expecting average pre-tax, pre-provision earnings will inch up just one per cent as banks face tough year-over-year comparisons in their capital markets units. We’ll set the scene throughout the day, and look forward to speaking with Rob Wessel from Hamilton ETFs at 9:10 a.m. and Nigel D’Souza from Veritas at 3:10 p.m.

RATE EXPECTATIONS

Would the Bank of Canada dare to launch liftoff with a half-point hike next Wednesday? Based on the data that Bloomberg tracks, the answer appears to be maybe. But if you caught our recent conversations with David Rosenberg and Benjamin Tal, it’s clear that those two economists see no merit in anything more than a quarter-point move. We’ll stay on top of this chase and aim to hear from someone who’s in the half-point camp. Might as well point out here the Canadian dollar has been up as much as four-tenths of a cent against the U.S. dollar this morning.